Question 4 How many statements about historical asset returns and risk premium are correct? 1. The risk premium of the risk-free asset is always zero. ii. In finance, we typically use T-bill rate as the risk-free rate. iii. Among stocks and bonds, investors should only hold stocks, because in the long-run expected returns of stocks are higher. iv. A higher inflation expectation generally reduces present values of both stocks and bonds. O One Two Three O Four