In 2000, the S&P 500 Index Earned 11 Percent While

question 111

Multiple Choice

In 2000, the S&P 500 Index earned 11 percent while the T-bill yield was 4.4 percent. Given this information, which of the following statements is correct with respect to the market risk premium?

• A) The market risk premium must have been negative.
• B) The market risk premium must have been positive.
• C) The market risk premium must have been zero.
• D) Unable to answer without more information.

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Definitions:

Mycorrhizal

Referring to a symbiotic association between the roots of plants and fungi, in which the fungus enhances the plant's nutrient absorption in exchange for carbohydrates.

Ants

Small, social insects belonging to the family Formicidae, known for their complex societies and behaviors.

Density-Dependent Factor

Biotic factor, such as disease or competition, that affects population size in a direct relationship to the population’s density.

Density-Independent Factor

Abiotic factor, such as fire or flood, that affects population size independent of the population’s density.