Multiple Choice
The market has an expected rate of return of 9.8%. Long-term government bonds are expected to yield 4.5% and Treasury bills are expected to yield 3.4%. The inflation rate is 3.1%. What is the market risk premium?
A) 2.2%
B) 3.3%
C) 5.3%
D) 6.4%
E) 6.7%
Correct Answer:
Verified
Correct Answer:
Verified
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