Computing the market risk premium


Desreumaux Inc's stock has an expected return of 12.25%, a beta of 1.25, and is in equilibrium. If the risk-free rate is 5.00%, what is the market risk premium?

A. 5.80%

B. 5.95%

C. 6.09%

D. 6.25%

E. 6.40%

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Basic Statistics: Computing the market risk premium
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