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Assume a 20-Year Period Produced Small-Company Returns of 16

Question 5

Multiple Choice

Assume a 20-year period produced small-company returns of 16.7 percent with a risk premium of 9.8 percent,inflation of 5.4 percent,and long-term government bond returns of 10.1 percent.What was the risk-free rate of return during this period?


A) 4.7%
B) 6.6%
C) 11.3%
D) 6.9%
E) 4.4%

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