{"id":49831,"date":"2024-04-15T23:01:34","date_gmt":"2024-04-15T23:01:34","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=49831"},"modified":"2024-04-15T23:01:34","modified_gmt":"2024-04-15T23:01:34","slug":"market-risk-premium-is-8-and-risk-free-return-is-7-then-market-required-return-would-be","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/market-risk-premium-is-8-and-risk-free-return-is-7-then-market-required-return-would-be\/","title":{"rendered":"Market risk premium is 8% and risk free return is 7% then market required return would be"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;15.00%&#8221; option2=&#8221;1.00%&#8221; option3=&#8221;5.60%&#8221; option4=&#8221;1.14%&#8221; correct=&#8221;option1&#8243;]<!--more--><\/p>\n<p>The correct answer is A. 15.00%.<\/p>\n<p>The market risk premium is the additional return that investors demand for investing in risky assets over risk-free assets. The risk-free return is the return that investors can expect to earn on an investment with no risk. The market required return is the return that investors demand for investing in the market.<\/p>\n<p>To calculate the market required return, we can use the following formula:<\/p>\n<p>Market required return = Risk-free return + Market risk premium<\/p>\n<p>In this case, the risk-free return is 7% and the market risk premium is 8%. Therefore, the market required return is 15%.<\/p>\n<p>Option B is incorrect because it is the risk-free return. Option C is incorrect because it is the sum of the risk-free return and the market risk premium. Option D is incorrect because it is the market risk premium divided by the risk-free return.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;15.00%&#8221; option2=&#8221;1.00%&#8221; option3=&#8221;5.60%&#8221; option4=&#8221;1.14%&#8221; correct=&#8221;option1&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-49831","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Market risk premium is 8% and risk free return is 7% then market required return would be<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/market-risk-premium-is-8-and-risk-free-return-is-7-then-market-required-return-would-be\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Market risk premium is 8% and risk free return is 7% then market required return would be\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;15.00%&#8221; 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