Government of Canada T-Bill Rate of Return Is Widely Used

Multiple Choice

Government of Canada t-bill rate of return is widely used as the risk-free rate of return. If the average rate of return on Government of Canada t-bills is 5.3% and the average rate of return on a Canadian common stock is 11.7%, then the stock's risk premium is:

A) 12.3%
B) 6.4%
C) 17.0%
D) 2.2%