Question
Stock A returns in years 1, 2, 3 and 4 are 0.02, 0.032, 0.018, and 0.03. Stock B returns are 0.041, 0.031, 0.02, and 0.053.
Stock A returns in years 1, 2, 3 and 4 are 0.02, 0.032, 0.018, and 0.03. Stock B returns are 0.041, 0.031, 0.02, and 0.053.
Average return from short-term government bond over these years is 1%. How much is the average risk premium from stock A?
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