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You require a risk premium of 3.5 percent on an investment in a company. The pure rate of interest in the market is 3.0 percent
You require a risk premium of 3.5 percent on an investment in a company. The pure rate of interest in the market is 3.0 percent and the inflation premium is 3 percent. US Treasury bills are risk free. What should be the yield of the US Treasury bills? Use multiplicative form.
A. | 5.83% | |
B. | 6.09% | |
C. | 5.58% | |
D. | 5.32% | |
E. | 5.06% | |
F. | 6.35% |
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