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Given the following data, compute the risk premium for exposure to market risk and the risk premium for exposure to interest rate risk. EM Energy

Given the following data, compute the risk premium for exposure to market risk and the risk premium for exposure to interest rate risk. EM Energy has a market beta of 1.25 and a T-bond beta of 0.87. The risk premium of the market index is 7% and that of the T-bond portfolio is 2%. The risk free rate is 2.5%.

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