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You Own a Stock with an Average Historical Risk Premium

Question 28

Multiple Choice

You own a stock with an average historical risk premium of 6.8%. The risk-free rate next year is expected to be 4.6%. What rate of return should you expect on your stock for next year?


A) 4.60%
B) 11.38%
C) 11.87%
D) 11.40%
E) 2.20%

Correct Answer:

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