Suppose the current interest rate on U.S. Treasury bills is 6.2 percent. Ibbotson and Sinquefield found the
Question:
Suppose the current interest rate on U.S. Treasury bills is 6.2 percent. Ibbotson and
Sinquefield found the average return on Treasury bills from 1926 through 1997 to be 3.8
percent. The average return on common stock during the same period was 13.0 percent.
Given this information, what is the current expected return on common stocks?
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