Question 10

The total annual returns on large company common stocks averaged 12.3% from 1926 to 2011, small company stocks averaged 17.4%, long-term government bonds averaged 5.8%, while Treasury Bills averaged 3.8%. What was the average risk premium earned by long-term government bonds, and small company stocks respectively?

		A. 1.8%; 13.3%
		B. 2.0%; 13.6%
		C. 4.4%; 11.9%
		D. 9.5%; 1.8%
		E. None of these