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    Corporate Finance Study Set 12
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    Exam 10: Risk and Return: Lessons From Market History
  5. Question
    If the Expected Return on the Market Is 16%, Then
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If the Expected Return on the Market Is 16%, Then

Question 23

Question 23

Multiple Choice

If the expected return on the market is 16%, then using the historical risk premium of 8.5%, the current risk-free rate is:


A) 4.5%.
B) 7.5%.
C) 10.0%.
D) 10.5%.
E) 12.5%.

Correct Answer:

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