Over the Past Ten Years, Large-Company Stocks Have Returned an Average

Multiple Choice

Over the past ten years, large-company stocks have returned an average of 11.6 percent annually, long-term corporate bonds have earned 6.4 percent, and U. S. Treasury bills have returned 3.2 percent. How much additional risk premium would you have earned if you had invested in large-company stocks rather than long-term corporate bonds over those ten years?

A) 1.7 percent
B) 3.7 percent
C) 5.2 percent
D) 5.6 percent
E) 8.1 percent