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Mei Is considering making an investment in Alliah company stock. Because the stock is riskier than the return, she could earn by investing in risk-free

Mei Is considering making an investment in Alliah company stock. Because the stock is riskier than the return, she could earn by investing in risk-free assets such as treasury bonds, she requires a higher rate of return- an additional 5%. What does this additional 5% return represent?

  1. Interest risk.
  2. real interest rate.
  3. Nominal interest rate.
  4. Risk premium.

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