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The average annual return on a broad market index over a ten year period was 13.5 percent. The average annual T-bill yield during the same
The average annual return on a broad market index over a ten year period was 13.5
percent. The average annual T-bill yield during the same period was 2.5 percent. What was the
market risk premium during these 10 years?" (Cornett, Adair, & Nofsinger, 2016). Define, in
your own words, the term, market risk premium.
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