Government of Canada T-Bill Rate of Return Is Widely Used

question 43

Multiple Choice

Government of Canada t-bill rate of return is widely used as the risk-free rate of return. If the average rate of return on Government of Canada t-bills is 5.3% and the average rate of return on a Canadian common stock is 11.7%, then the stock's risk premium is:

• A) 12.3%
• B) 6.4%
• C) 17.0%
• D) 2.2%

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Definitions:

Ekman

Refers to Paul Ekman, a psychologist known for his research on nonverbal behavior and the universality of facial expressions in conveying emotions.

Guilt

A negative emotional state associated with anxiety, tension, and agitation.

Vague Sense

An indistinct or unclear perception or understanding of something, often leaving one uncertain.

Secondary Emotion

Emotions that are a blend of primary emotions and include feelings such as guilt, shame, embarrassment, and pride.