The Market Has an Expected Rate of Return of 10

Multiple Choice

The market has an expected rate of return of 10.29 percent.The long-term government bond is expected to yield 4.73 percent,and the U.S.Treasury bill is expected to yield 3.21 percent.The inflation rate is 3.09 percent.What is the market risk premium?

A) 7.20%
B) 9.73%
C) 6.78%
D) 8.33%
E) 7.08%