Problem 8-4 Expected and required rates of return Assume that the risk-free rate is 4% and the market risk premium is 5%. What is the expected return...

Problem 8-4 Expected and required rates of return

Assume that the risk-free rate is 4% and the market risk premium is 5%.

1. What is the expected return for the overall stock market? Round your answer to two decimal places. %
2. What is the required rate of return on a stock with a beta of 2.1? Round your answer to two decimal places. %