In a Year in Which Common Stocks Offered an Average

question 52

Multiple Choice

In a year in which common stocks offered an average return of 18 percent, Treasury bonds offered 10 percent and Treasury bills offered 7 percent, the risk premium for common stocks was:

• A)1 percent.
• B)3 percent.
• C)8 percent.
• D)11 percent.

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Definitions:

Future Health Care

Planning, policies, and services designed to meet the health care needs of individuals in the future.

Inter Vivos Gift

A gift given by one living person to another, which becomes the property of the recipient immediately and unconditionally.

Trust Creation

The process of setting up a trust, wherein a trustee holds property or assets for the benefit of a third party, known as the beneficiary.

Consideration

The payment or promise of something of value given by one party to another in exchange for an act or promise that forms the basis of a contract.