You own a stock with an average historical risk premium of 7.4 percent. The risk-free rate next year will be 4.1 percent. What do you expect the stock return to be next year?
A) 4.1%
B) 7.4%
C) 9.8%
D) 10.6%
E) 11.5%

Question

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The Answer of You own a stock with an average historical risk premium of 7.4 percent. The risk-free rate next year will be 4.1 percent. What do you expect the stock return to be next year?
A) 4.1%
B) 7.4%
C) 9.8%
D) 10.6%
E) 11.5%

You Own a Stock with an Average Historical Risk Premium