The Total Annual Returns on Common Stocks Averaged 13

Multiple Choice

The total annual returns on common stocks averaged 13.3% from 1957 to 2003. Small company stocks averaged 10.64%, long-term bonds averaged 8.96%, while Treasury Bills averaged 6.8%. What was the average risk premium earned by long-term Bonds, and small company stocks respectively?

A) 9.5%; 1.8%
B) 4.4%; 11.9%
C) 2.16%; 3.84%
D) 1.8%; 13.3%