Multiple Choice
In 2000, the S&P 500 Index earned 11 percent while the T-bill yield was 4.4 percent. Given this information, which of the following statements is correct with respect to the market risk premium?
A) The market risk premium must have been negative.
B) The market risk premium must have been positive.
C) The market risk premium must have been zero.
D) Unable to answer without more information.
Correct Answer:
Verified
Correct Answer:
Verified
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