What is the risk premium assessed for this opportunity

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Reference no: EM13908918

An investor considering an opportunity that promises to provide 12% returns. They have obtained an estimate of their risk free rate, which is 3%. What is the risk premium assessed for this opportunity?

What does the risk premium mean in this example?

If the investor’s [stock] market portfolio provides a return of 10%, would you assess that the opportunity is more or less risky than their present holdings?

Reference no: EM13908918

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