Use the Following Information to Answer the Question(s) Below

question 90

Multiple Choice

Use the following information to answer the question(s) below

Assume that the risk-free rate of interest is 3% and you estimate the market's expected return to be 9%.
-The risk premium for "Meenie" is closest to:

• A)4.50%.
• B)7.50%.
• C)9.30%.
• D)9.75%.

---

Definitions:

Macroeconomic Theory

Macroeconomic theory involves the study and analysis of economy-wide phenomena, including inflation, national income, and unemployment.

Political Philosophy

A branch of philosophy focused on discussing and analyzing various views about who should rule, the nature of just governance, and the role of citizens in a state.

Monetarist

An economist who believes that variations in the money supply are the main source of economic fluctuations.

Nominal Rate

The interest rate before adjustments for inflation, as opposed to the real interest rate which is adjusted.