The term "anticipated return" refers to the expected rate of return on an investment, and it is frequently computed by allocating weights to each investment in the portfolio according to its individual return, then adding the results together.
The following formula is used to determine a stock's estimated risk premium: Expected return from a stock minus the risk-free rate equals expected risk premium. According to the details provided in the inquiry, 10% is the expected return on a stock; 1.5% is the risk-free rate;
By using the above data in the formula, we arrive at the projected stock risk premium of = 10% - 1.5% = 8.5%.
Consequently, the stock's anticipated risk premium is 8.5%.
The answer is = 8.5.
The return an investor anticipates receiving from a single investment or a portfolio of investments is known as the expected return on investment. This assumed return is neither a certainty or an assured result because it is based on the idea of chance.
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