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Consider the Case of a Simple One-Period Framework

Question 32

Multiple Choice

Consider the case of a simple one-period framework.If i = 12.50%, k = 14.85%, p = 0.98, and g = 0.85 what is the required risk premium (round to two decimals) ?


A) 0.34%
B) 0.35%
C) 0.98%
D) 2.35%

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