Suppose that the risk free rate is 5 and that the market ris

Suppose that the risk free rate is 5% and that the market risk premium is 7%. What is the required return on (1) the market, (2) a stcok with a beta of 1.0, and (3) a stock with a beta of 1.7? Assume that the risk free rate is 5% and that the market risk premium is 7%.

required return on (1) the market = 7%+5% = 12%

2)a stcok with a beta of 1.0 = 5%+1*7% = 12%