Question #3

There are 3 parts that need to be answered.

Given a real rate of interest of 1.5%, an expected inflation premium of 4.8%, and risk premiums for investments A and B of 3.9% and 5.4% respectively, find the following: a. The risk-free rate of return, rf b. The required returns for investments A and B a. The risk-free rate of return is \%. (Round to one decimal place.)