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Table 3: Market Data Stock B Stock C 1,14 Stock A 0,45 0,08% 1.53% 5,60% Beta () 1-Yr US Treasury Note 10-yr US Treasury Note

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Table 3: Market Data Stock B Stock C 1,14 Stock A 0,45 0,08% 1.53% 5,60% Beta () 1-Yr US Treasury Note 10-yr US Treasury Note Market Risk Premium 0,08% 0.17 0,08% 1,53% 5,60% Stock D 2,17 0.08% 1,53% 5,60% 1,53% 5,60% 6. Given the information in Table 3, what is the risk premium for each stock separately, and which stock (A, B, C or D) has a highest risk premium? Please specify which formula you used to calculate risk premium for the security. (4 points) Answer: B C D Risk Premium for security

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