The market has an expected rate of return of 9.8%. The long-term government bond is expected to yield 4.5% and the U.S. Treasury bill is expected to yield 3.2%. The inflation rate is 3.1%. What is the market risk premium?

A.
2.2%

B.
3.3%

C.
6.6%

D.
6.4%

Question

The market has an expected rate of return of 9.8%. The long-term government bond is expected to yield 4.5% and the U.S. Treasury bill is expected to yield 3.2%. The inflation rate is 3.1%. What is the market risk premium?

	A.	2.2%
	B.	3.3%
	C.	6.6%
	D.	6.4%

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Question

The market has an expected rate of return of 9.8%. The long-term government bond is expected to yield 4.5% and the U.S. Treasury bill is

The market has an expected rate of return of 9.8%. The long-term government bond is expected to yield 4.5% and the U.S. Treasury bill is expected to yield 3.2%. The inflation rate is 3.1%. What is the market risk premium?

A.
2.2%

B.
3.3%

C.
6.6%

D.
6.4%

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Question

The market has an expected rate of return of 9.8%. The long-term government bond is expected to yield 4.5% and the U.S. Treasury bill is

The market has an expected rate of return of 9.8%. The long-term government bond is expected to yield 4.5% and the U.S. Treasury bill is expected to yield 3.2%. The inflation rate is 3.1%. What is the market risk premium? A. 2.2% B. 3.3% C. 6.6% D. 6.4%

Step by Step Solution

Step: 1

Get Instant Access with AI-Powered Solutions

Step: 2

Step: 3

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The market has an expected rate of return of 9.8%. The long-term government bond is expected to yield 4.5% and the U.S. Treasury bill is expected to yield 3.2%. The inflation rate is 3.1%. What is the market risk premium?

A.
2.2%

B.
3.3%

C.
6.6%

D.
6.4%