Question
The expected return on stock A is 11.25 percent. The expected return on stock B is 8.50 percent. Assuming CAPM holds, if the beta of
The expected return on stock A is 11.25 percent. The expected return on stock B is 8.50 percent. Assuming CAPM holds, if the beta of stock A is higher than the beta of stock B by 0.15, what should the risk premium be? (Round answer to 2 decimal places, e.g. 2.36%.)
| Risk premium | Type your answer here % |
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Handbook Of Financial Econometrics
Authors: Yacine Ait-Sahalia, Lars Peter Hansen
1st Edition
044450897X, 978-0444508973
