Stock a has a beta of 2 and investors expect it to return 4, Financial Management

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Stock a has a beta of 2 and investors expect it to return 4

Stock A has a beta of .2, and investors expect it to return 4%. Stock B has a beta of 1.8, and investors expect it to return 8%. Use the CAPM to find the expected rate of return and the market risk premium on the market. (Do not round intermediate calculations. Round your answers to 1 decimal place.)

Expected rate of return %

Market risk premium %

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Financial Management: Stock a has a beta of 2 and investors expect it to return 4

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Financial Management: Stock a has a beta of 2 and investors expect it to return 4

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