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begin{tabular}{|l|c|} & Average annual rate of return (nominal) hline Treasury bills & 0.027 hline Government bonds & 0.039 hline Corporate bonds &

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\begin{tabular}{|l|c|} & Average annual rate of return (nominal) \\ \hline Treasury bills & 0.027 \\ \hline Government bonds & 0.039 \\ \hline Corporate bonds & 0.057 \\ \hline Common stocks (Standard \& Poor 500 ) & 0.123 \\ \hline Small-firms & 0.158 \\ \hline \end{tabular} 5) Based on the foregoing table, calculate Small-firms' stocks historical average risk premium. a. 13.1 percent b. 11.9 percent c. 9.6 percent d. 8.4 percent 6) (Continuation). Calculate the expected return of Routledge Co., Ltd. considering that the risk of the stock is the same as the common stocks market portfolio' s risk and taking into consideration the information in the table above. T-bills today' s return is 3.2 percent. a. 16.3 percent b. 19.0 percent c. 12.8 percent d. 15.5 percent

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