Stock A has a beta of 1.71 and has the same reward-to-risk ratio as stock B. Stock B has a beta of 0.91 and an expected return of 10.76 percent. What is the expected return (in percents) on stock A if the risk-free rate is 4.19 percent?

An unexpected return is a return that:

		results from a surprise announcement or event.
		Lies on the security market line when graphically represented.
		is computed using the Capital Asset Pricing Model.
		is discounted by the marketplace by an event prior to that event occurring.
		occurs only when the market is inefficient. The amount of compensation an investor should expect to receive for accepting the unsystematic risk associated with a security is equal to the market risk premium. T or F An unexpected return is a return that results from a surprise announcement or event. T or F