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Assume that, historically, the inflation rate averaged 3.0 percent and the U.S. Treasury bill yield was 3.5 percent, and the historical risk premlum on small-company

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Assume that, historically, the inflation rate averaged 3.0 percent and the U.S. Treasury bill yield was 3.5 percent, and the historical risk premlum on small-company stocks was 13.2 percent. If these averages hold, what nominal rate of return should you expect to earn on small-company stocks over the next several years? Multiple Choice 15.5%

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