Suppose you observe the following situation:

				Rate of Return if State Occurs
State of	Probability of
Economy	State			Stock A			Stock B
Bust		0.25			0.08			0.05
Normal		0.60			0.13			0.14
Boom		0.15			0.48			0.29

a.	Calculate the expected return on each stock. (Round your answers to 2 decimal places. (e.g., 32.16))

	Expected return
Stock A	%
Stock B	%

b.	Assuming the capital asset pricing model holds and stock A's beta is greater than stock B's beta by 0.25, what is the expected market risk premium?

Expected market risk premium

%