What is the expected return of a stock with a risk premium of 7.6 percent if the risk-free rate is 4.8 percent?
A) 12.4%
B) 13.1%
C) 11.3%
D) 2.8%
E) 11.7%

Name: What is the expected return of a stock with a risk premium of 7.6 percent if the risk-free rate is 4.8 percent? A) 12.4% B) 13.1% C) 11.3% D) 2.8% E) 11.7%
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Question

Quizplus · Accepted Answer

The expected return of a stock can be calculated by adding the risk premium to the risk-free rate. Therefore, 7.6% (risk premium) + 4.8% (risk-free rate) = 12.4%.

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