The expected return on Karol Co. stock is 16.5 percent. If the risk-free rate is 5 percent and the beta of Karol Co is 2.3, then what is the risk premium on the market portfolio? ○ 5.0% 2.5% 7.5% O 10.0%
The expected return on Karol Co. stock is 16.5 percent. If the risk-free rate is 5 percent and the beta of Karol Co is 2.3, then what is the risk premium on the market portfolio? ○ 5.0% 2.5% 7.5% O 10.0%
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 14P
Question
![The expected return on Karol Co. stock is 16.5 percent. If the risk-free rate is 5 percent and the beta of Karol Co is 2.3, then what is the
risk premium on the market portfolio?
○ 5.0%
2.5%
7.5%
O 10.0%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F93d6464e-f155-4940-8921-7114e2ab97cc%2F22cd707b-a950-43cc-be63-45ef6614caa4%2Fkoul4ds_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The expected return on Karol Co. stock is 16.5 percent. If the risk-free rate is 5 percent and the beta of Karol Co is 2.3, then what is the
risk premium on the market portfolio?
○ 5.0%
2.5%
7.5%
O 10.0%
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