Given the following data: risk-free rate = 4%, average risk premium = 7.7%. Calculate the required rate of return:
A) 5.6%
B) 7.6%
C) 11.7%
D) None of the given answers

Question

Quizplus · Accepted Answer

The required rate of return is calculated by adding the risk-free rate and the average risk premium. Therefore, Required Rate of Return = Risk-Free Rate + Average Risk Premium = 4% + 7.7% = 11.7%. Option C is the correct answer.

Given the Following Data: Risk-Free Rate = 4%, Average Risk