Problem 37

Intro

Below are the expected returns for different asset classes for next year:

Asset class	Exp. return
T-bills	2.2%
Corporate bonds	6.6%
Small company stocks	15.6%
Large company stocks	9.5%

Attempt 1/10 for 8 pts.

Part 1

What is the risk premium for corporate bonds?

Attempt 1/10 for 8 pts.

Part 2

What is the risk premium for small company stocks?

Attempt 1/10 for 8 pts.

Part 3

What is the risk premium for large company stocks?