Given the following information, what is the historical real return for long-term government bonds?

Long-term government	6.40%
Long-term corporate	6.50%
Inflation rate	3.15%

(A) 9.75%

(B) 3.25%

(C) 3.15% (D) -3.36%

Consider the following information about two stocks and indicate which stock has the most systematic risk.

State	Probability	Stock A	Stock B
Recession	0.15	0.11	(0.35)
Norman	0.55	0.18	0.11
Boom	0.30	0.08	0.31

Market risk premium	8.50%
Risk-free rate	3.00%

(A) Both risk are the same

(B) Stock B

(C) Stock A

(D) Neither stock has any systematic risk