question archive The risk premium is % on stock C given the following information: risk-free rate = 4%, market return = 15%, stock C's beta = 1
The risk premium is % on stock C given the following information: risk-free rate = 4%, market return = 15%, stock C's beta = 1
Subject:FinancePrice:2.86 Bought15
The risk premium is % on stock C given the following information: risk-free rate = 4%, market return = 15%, stock C's beta = 1.15.
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Risk Premium on Stock C = Beta * (Market Risk - Risk-Free rate)
= 1.15 (15% - 4%)
= 12.65%
Risk premium on a stock is the amount of premium you are expecting from the stock due to the systematic risk.
So it is 12.65%
