The historical annual average return of small stocks was 16.5%, and the historical annual risk free rate was 3.6% for the same period. The historical risk premium of small stocks is for that period, and if the current risk free rate is 1%, a sensible required return for a small stock portfolio right now should be 12.9%; 16.5% 15.5%; 16.5% 15.5%; 13.9% 12.9%; 13.9%