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# 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%.

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