Exhibit 31
Use the Information Below for the Following Problem(S)

question 15

Multiple Choice

Exhibit 3.1
Use the Information Below for the Following Problem(S)
$\begin{array}{lc}\text { Security } & \text { Annual Percentage Return } \\\hline \text { U.S. government T-bills } & 3.04 \\\text { Long-term government bonds } & 5.75 \\\text { Long-term corporate bonds } & 6.80 \\\text { Large capitalization common stocks } & 13.50 \\\text { Small canitalization common stocks } & 15.60\end{array}$

The annual rate of inflation is 2%.
-Refer to Exhibit 3.1.What is the real return on T-bills?

• A) 1.02%
• B) 3.68%
• C) 4.71%
• D) 11.27%
• E) 13.33%