Question 2.5 pts The main variables in determining market risk premium for a stock using CAPM are 1 option prices 2. bond prices 3. risk free rate expected return from the market 5. Beta The MODEL that is most often used to show the relationship between expected return on a stock and betais Select 1. E/Rstock) - E(Rmarket) +R* Beta 2. E[Rstock) - Rf + Beta/R/ 3. E/Rstock) - RF+ (Risk premium) Beta 4. E/Rstock} = Risk premium/Beta + S&P500 return Note: Rf = risk free rate, E[Rstock) = expected return on the stock. E(Rmarket) - Expected return on the market