An analyst gathered the following information (shown below) about the capital markets in the United States and in Paragon, a developing country. Based on the analysts data, the estimated country equity premium for Pagaron is closest to:

a) 4.29%

b) 6.00%

c) 8.40%

Selected market information
Yield on U,S 10-year Treasury bond	4.5%
Yield in Paragon 10-year government bond	10.5%
Annualized standard deviation of Paragon stock index	35.0%
Annualized standard deviation of Paragon dollar-denominated government bond	25.0%