Explore BrainMass

Explore BrainMass

    Market Risk Premium for Treasury Bill

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    The Treasury bill rate is 4 percent, and the expected return on the market portfolio is 12 percent. Using the capital asset pricing model:

    - What is the risk premium on the market?

    © BrainMass Inc. brainmass.com June 3, 2020, 10:15 pm ad1c9bdddf
    https://brainmass.com/business/capital-asset-pricing-model/capm-t-bill-rate-is-4-percent-expected-return-is-12-percent-what-is-risk-premium-222536

    Solution Summary

    Brief calculations show how to find the risk premium on a bill with a 4% rate and 12% expected return, using CAPM.

    $2.19

    ADVERTISEMENT