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Suppose the current interest rate on U.S. Treasury bills is 2 percent. The average return on Treasury bills from 1926 through 2006 was 3.8 percent.

Suppose the current interest rate on U.S. Treasury bills is 2 percent. The average return on Treasury bills from 1926 through 2006 was 3.8 percent. The average return on common stock during the same period was 12.2 percent. Given this information what is the current expected return on common stock?

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