Suppose Paycheck Inc has a beta of 077 If the market return

Suppose Paycheck, Inc., has a beta of 0.77. If the market return is expected to be 13.80 percent and the risk-free rate is 6.80 percent, what is Paycheck’s risk premium? (Round your answer to 2 decimal places.)

Answer: 5.39% Calculation: As per CAPM, the risk premium for a stock = Beta*(Expected market return-Risk free rate) = 0.77*(13.80-*6.80) = 5.39%