Computation of the risk premium for an individual security

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Reference no: EM131070785

Which one of the following is the computation of the risk premium for an individual security?

E(R) is the expected return on the security, Rf is the risk-free rate, β is the security's beta, and E(RM) is the expected rate of return on the market.

E(RM) - Rf

E(R) - E(RM)

E(R) - [E(RM) + Rf]

β[E(RM) - Rf]

β[E(R) - Rf]

Reference no: EM131070785

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