Assume that the risk-free rate is 35 and the market risk


Expected and required rates of return

Assume that the risk-free rate is 3.5% and the market risk premium is 7%.

a. What is the required return for the overall stock market? Round your answer to two decimal places. %

b. What is the required rate of return on a stock with a beta of 1.2? Round your answer to two decimal places. %

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Financial Management: Assume that the risk-free rate is 35 and the market risk
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