What is the expected return for the overall stock


Expected and required rates of return

Assume that the risk-free rate is 3.5% and the market risk premium is 4%.

1. What is the expected return for the overall stock market? Round your answer to two decimal places.

%

2. What is the required rate of return on a stock with a beta of 1.5? Round your answer to two decimal places.

%

MUST ANSWER BOTH AND EXPLAIN FULLY

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Financial Management: What is the expected return for the overall stock
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