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Suppose you observe the following situation: State of Economy Probability of State Return if State Occurs Stock A Stock B Boom . 1 9 .

Suppose you observe the following situation:
State of Economy Probability of State Return if State Occurs
Stock A Stock B
Boom .19.11.05
Normal .74.15.14
Bust .07.52.25
Calculate the expected return on each stock.
Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g.,32.16.
Assuming the capital asset pricing model holds and Stock As beta is greater than Stock Bs beta by .20, what is the expected market risk premium?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.,32.16.

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