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Based on the past 92 years, the U.S. Treasury bill yield was 3.4 percent, and the historical risk premium on small-company stocks was 13.1 percent.

Based on the past 92 years, the U.S. Treasury bill yield was 3.4 percent, and the historical risk premium on small-company stocks was 13.1 percent. If these averages hold, what nominal rate of return should you expect to earn on small-company stocks over the next several years?

13.1 percent

3.4 percent

16.5 percent

9.7 percent

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