The Annual Return on the S&P 500 Index Was 12

Multiple Choice

The annual return on the S&P 500 Index was 12.4 percent. The annual T-bill yield during the same period was 5.7 percent. What was the market risk premium during that year?

A) 5.7 percent
B) 6.7 percent
C) 12.4 percent
D) 18.1 percent