Penguin International's stock has an expected return of 13.3 %, a beta of 1.25. If the risk-free rate is 2 %, what is the market risk premium according to the CAPM?
Penguin International's stock has an expected return of 13.3 %, a beta of 1.25. If the risk-free rate is 2 %, what is the market risk premium according to the CAPM?
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 14P
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Market risk premium
![Penguin International's stock has an expected
return of 13.3 %, a beta of 1.25. If the risk-free
rate is 2 %, what is the market risk premium
according to the CAPM?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F43868a99-d66a-4aaa-9300-ca9ee774ca91%2F1e4c1904-74a7-4859-a40d-e7e0443ab613%2F6kndmr_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Penguin International's stock has an expected
return of 13.3 %, a beta of 1.25. If the risk-free
rate is 2 %, what is the market risk premium
according to the CAPM?
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