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Assume that over the past 85 years, the total annual returns on large-company common stocks averaged 12.3 percent, small-company stocks averaged 17.4 percent, long-term government
Assume that over the past 85 years, the total annual returns on large-company common stocks averaged 12.3 percent, small-company stocks averaged 17.4 percent, long-term government bonds averaged 5.7 percent, and U.S. T-bills averaged 3.8 percent. What was the average risk premium earned by long-term government bonds, and small-company stocks respectively.
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