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From 1926 to 2005, the Total Annual Returns on Large

Question 17

Multiple Choice

From 1926 to 2005, the total annual returns on large company US ordinary shares averaged 12.4%, small company shares averaged 17.5%, long-term government bonds averaged 5.8% and Treasury
Bills averaged 3.8%.What was the average risk premium earned by long-term government bonds
And small company shares respectively during that period of time?


A) 1.8%; 13.3%
B) 2.0%; 13.7%
C) 4.4%; 11.9%
D) 9.5%; 1.8%
E) None of the above.

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