What is the expected return on the market portfolio at a


1. What is the expected return on the market portfolio at a time when the risk free rate (e.g., T-Bill rate) is 4% and a stock with a beta of 1.5 is expected to yield 16%?

2. What's the risk premium for the stock?

3. A company's equity beta is 1.2. The risk-free rate is 5% and the market risk premium is 6%. What is the company's cost of equity?

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Financial Management: What is the expected return on the market portfolio at a
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