You Are Certain That a Normal Rate of Return Is

question 278

Multiple Choice

You are certain that a normal rate of return is 18% for the computer industry. What do you expect for a normal rate of return in the computer software industry, which is considered to be much riskier than the computer industry?

• A) 18%
• B) Less than 18%
• C) Above 18%
• D) The rate on government bonds

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