When Treasury Bills Yield 7

question 50

Multiple Choice

When Treasury bills yield 7.0% and the expected return on the market is 16%, then the risk premium on an asset is equal to:

• A)7.0%.
• B)16.0%.
• C)9.0% times the asset's Beta.
• D)8.0% plus the risk-free rate.

---

Definitions:

λmax

The wavelength at which a substance exhibits maximum absorbance, often used in spectroscopy to characterize compounds.

UV Spectrum

The part of the electromagnetic spectrum that encompasses ultraviolet light, used in studying molecular structures and chemical properties.

1,5-hexadiene

A linear diene compound with six carbon atoms and two double bonds located at the 1st and 5th carbon atoms.

π Transition

A type of electronic transition in molecules involving the excitation of an electron in a pi (π) bond to a higher energy state.