Reasonable estimate of the market risk-premium in percentage

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Suppose CAPM works, and you know that the expected returns on Google and IBM are estimated to be 15.50% and 12.25%, respectively. You have just calculated extremely reliable estimates of the betas of Google and IBM to be 1.39 and 0.87, respectively. Given this data, what is a reasonable estimate of the market risk-premium in percentage (the average/expected difference between the market return and the risk-free rate?)

Reference no: EM13767847

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