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What expected returns should an investor expect from investments in common stock? You are given the following information: Risk free rate of return = 2%;

What expected returns should an investor expect from investments in common stock? You are given the following information: Risk free rate of return = 2%; market risk premium = 10%; Beta of the stock (assume CAPM holds) = 0.75. B) Stock A with beta of 0.75 offers a 10% return while stock B with a beta of 1.5 offers a 20% return. What is the risk-free rate? What is the common market return? Assume CAPM holds

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