Suppose you observe the following situation:

State of Economy Probability of State Rate of Return if State Occurs

Stock A Stock B

Recession $0\mathrm{.}350\mathrm{.}110\mathrm{.}09$

Normal $0\mathrm{.}400\mathrm{.}100\mathrm{.}10$

Irrational exuberance $0\mathrm{.}250\mathrm{.}450\mathrm{.}25$

a$.$ Calculate the expected return on each stock. $($Round the final answers to $2$ decimal places.$)$

Expected Return

Stock A $\_\_\_\_\%$

Stock B $\_\_\_\_\_\%$

b$.$ Assuming the capital asset pricing model holds and stock A$\text{'}$s beta is greater than stock B$\text{'}$s beta by $0\mathrm{.}65,$ what is the expected market risk premium? $($Do not round intermediate calculations. Round the final answer to $2$ decimal places.$)$

Expected market risk premium $\_\_\_\_\_\_\_\_\_\%$