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Question 5 The total annual returns on large company stocks averaged 1 2 % from 1 9 2 6 to 2 0 1 8 ,

Question 5
The total annual returns on large company stocks averaged 12% from 1926 to 2018, small
company stocks averaged 18%, long-term government bonds averaged 5%, while Treasury
Bills averaged 3%. What was the average risk premium earned by large company stocks,
and small company stocks respectively?
9%;13%
7%;13%
9%;15%
2%;13%

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