You are considering buying shares of Ember Incorporated to add to your portfolio. Your broker tells you that Embers beta is 1.28 and that the current T-Bill rate is 2.5%. She also estimates that the return on the S&P500 index is 10%. Given this information, calculate the market risk premium.

Group of answer choices

10%

7.5%

9.6%

12.1%

None of the above are correct.