The Expected Return for Zbrite Stock Calculated Using the CAPM

Multiple Choice

The expected return for Zbrite stock calculated using the CAPM is 15.5 percent. The risk-free rate is 3.5 percent and the beta of the stock is 1.2. Calculate the implied market risk premium.

A) 5.5 percent
B) 6.5 percent
C) 10.0 percent
D) 15.5 percent
E) 12.0 percent