What is market risk premium that applies in stock market

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PGAS shares on the Indonesia Stock Exchange have an expected return for the next year of 14.6% and a beta of 1.1. The SPN (risk free) interest rate for the next year is 4.8%.

1. What is the risk premium of PGAS stock?

2. What is the market risk premium that applies in the stock market?

3. What is the market expected return (Rm) alias return from the JCI for the next year?

4. What is the difference between systematic risk and unsystematic risk? Give an example?

5. Which can be eliminated by diversification: systematic or unsystematic risk?

6. Which is measured by beta: systematic or unsystematic risk?

Reference no: EM133305514

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