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:

Notice

Formal communication or warning, often required by law or agreement, to inform a party about an action or condition.

Intended Beneficiary

A third party for whom a contract is created to benefit, giving them certain rights to enforce the contract.

Contract

A legally enforceable agreement between two or more parties that creates mutual obligations enforceable by law.

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