Assume That Large-Company Stocks Had an Average Rate of Return

Multiple Choice

Assume that large-company stocks had an average rate of return of 18.5 percent over the past 55 years while T-bills returned an average of 2.4 percent and inflation averaged 1.8 percent.Given this, the real return on large-company stocks was:

A) 13.56 percent
B) 12.49 percent
C) 16.40 percent
D) 14.83 percent
E) 15.99 percent