Suppose you observe the following situation:

				Return if State Occurs
State of	Probability of
Economy	State			Stock A			Stock B
Bust		.15			.10			.08
Normal		.60			.09			.08
Boom		.25			.32			.26

a.	Calculate the expected return on each stock. (Do not round intermediate calculations. 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 .25, what is the expected market risk premium? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

Expected market risk premium

%