Exhibit 31
Use the Information Below for the Following Problem(S)

question 70

Multiple Choice

Exhibit 3.1
Use the Information Below for the Following Problem(S)
$\begin{array}{lc}\text { Security } & \text { Annual Percentage Return } \\\hline \text { U.S. government T-bills } & 3.04 \\\text { Long-term government bonds } & 5.75 \\\text { Long-term corporate bonds } & 6.80 \\\text { Large capitalization common stocks } & 13.50 \\\text { Small canitalization common stocks } & 15.60\end{array}$

The annual rate of inflation is 2%.
-Refer to Exhibit 3.1.What is the real return on small capitalization stocks?

• A) 1.02%
• B) 3.68%
• C) 4.71%
• D) 11.27%
• E) 13.33%

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Definitions:

Middle Term

In a syllogism, the term that appears in both premises but not in the conclusion, serving as a link between the major and minor terms.

Syllogism

A form of logical reasoning where a conclusion is drawn from two given or assumed propositions (premises).

Mammals

Warm-blooded vertebrate animals characterized by the presence of mammary glands which, in females, produce milk for feeding their young.

Major Premise

The first statement in a syllogism, containing the major term that is also in the conclusion.