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You can either purchase a T-bill or a stock. The T-bill earns the risk-free rate of 2.5%, whereas the stock earns 6%. Explain the concept

You can either purchase a T-bill or a stock. The T-bill earns the risk-free rate of 2.5%, whereas the stock earns 6%. Explain the concept of a risk premium, and why investors might prefer one investment over the other?

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