The Historical Returns Data for the Past Three Years for Stock

question 60

Multiple Choice

The historical returns data for the past three years for Stock B and the stock market portfolio are: Stock B: 24%, 0%, 24%, Market Portfolios: 10%, 12%, 20%. If the risk-free rate is 4%, calculate the market risk premium.

• A) 18.1%
• B) 14%
• C) 10%
• D) None of the above

---

Definitions:

CERCLA Trust Fund

Also known as the Superfund, it is a fund established under the Comprehensive Environmental Response, Compensation, and Liability Act to finance the cleanup of hazardous substance spill and contamination sites.

Car Rental

A service where vehicles are rented out to customers for a short period of time, usually ranging from a few hours to weeks.

NEPA

The National Environmental Policy Act, a U.S. law aimed at ensuring federal agencies consider the environmental impact of their actions.

EIS

The Enterprise Investment Scheme, a series of UK tax reliefs designed to encourage investments in small and medium-sized growth companies.