Which of the Following Statements Regarding Estimating an Equity Premium

question 55

Multiple Choice

Which of the following statements regarding estimating an equity premium is false?

• A)The S&P 500 Index is commonly used to proxy for the market portfolio when using historical data to estimate an equity premium.
• B)If you are evaluating long-term projects, you should use the yield on a long-term Treasury bond as the risk-free rate in the equity premium equation.
• C)You should estimate an equity premium for each project you are evaluating.
• D)All of the above are true statements.

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Definitions:

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A sociological approach that focuses on the struggles between different social classes or groups for limited resources and power.

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