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of Question 32 (3 marks) Consider the following information about Stocks A and B. The market risk premium is 7%, and the
Posted: Mon May 30, 2022 7:19 am
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- Of Question 32 3 Marks Consider The Following Information About Stocks A And B The Market Risk Premium Is 7 And The 1 (25.05 KiB) Viewed 25 times
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Question 32 (3 marks) Consider the following information about Stocks A and B. The market risk premium is 7%, and the risk-free rate is 3% Rate of Return if State Occurs Probability of state of economy Stock A Stock B State of economy Recession 0.15 0.02 -0.25 Normal 0.70 0.21 0.09 Irrational exuberance 0.15 0.00 0.44 What are the approximate expected rates of returns for Stocks A and B? a 0.097 and 0.093 h. 0.210 and 0,090 0.159 and 0.092 d. 0.060 and 0.160 O OD O Od