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The market portfolio of common stocks earned 14.7% last year. Treasury bills earned 5.7% on average last year. The average inflation rate was 4.0%. What

The market portfolio of common stocks earned 14.7% last year. Treasury bills earned 5.7% on average last year. The average inflation rate was 4.0%. What was the real risk premium on equities?

A. 5.0%.

B. 9.0%.

C. 6.5%.

D. 12.2%.

E. 18.7%.

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