-The Historical Data for the Past Three Years for the Market

question 3

Multiple Choice

-The historical data for the past three years for the market portfolio are 10%, 10% and
16%) If the risk-free rate of return is 4%, what is the market risk premium?

• A) 4%
• B) 8%
• C) 16%
• D) None of the above

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Definitions:

Adequate

Adequate describes a condition or quality of being sufficient, acceptable, or satisfactory for a specific requirement or purpose.

Explanandum

The phenomenon or event that is to be explained in a scientific inquiry.

Uninformative

Providing no useful or relevant information.

Implausible

Not seeming reasonable or probable; failing to convince.