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thaank youuu Rate of Return If State Occurs State of Economy Bust Normal Boom Probability of State 15 .65 20 Stock A -07 .14 49

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Rate of Return If State Occurs State of Economy Bust Normal Boom Probability of State 15 .65 20 Stock A -07 .14 49 Stock B --05 .14 .29 a. Calculate the expected return on each stock. (Do not round interndediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Stock A Stock B Expected return % % b. Assuming the capital asset pricing model holds and Stock A's beta is greater than Stock B's beta by 50. what is the expected market risk premium? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Expected market risk premium

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