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Assume Inflation Averaged 3

Question 29

Multiple Choice

Assume inflation averaged 3.2 percent during a period in which U.S.Treasury bills earned 4.3 percent.What was the average real rate of return on large-company stocks if the risk premium on those stocks was 7.4 percent for the period?


A) 8.5%
B) 3.2%
C) .1%
D) 7.5%
E) 14.9%

Correct Answer:

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