Assume Inflation Averaged 1

question 52

Multiple Choice

Assume inflation averaged 1.2 percent during a period in which U.S.Treasury bills earned 1.3 percent.What was the rate of return on large-company stocks if the risk premium on those stocks was 6.8 percent for the period?

• A)8)1%
• B)8)0%
• C)7)9%
• D)9)3%
• E)9)2%

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Definitions:

Vagrancy

A condition of homelessness and joblessness, often criminalized, where individuals wander from place to place without a permanent home or lawful employment.

Self-denial

The act of sacrificing one's own desires or needs, often for ethical or religious reasons.

Puritan

A member of a group of English Protestants in the 16th and 17th centuries who sought to purify the Church of England from its "Catholic" practices, maintaining that the Church of England had not been fully reformed and needed to become more Protestant.

Independence

The condition or quality of being free from control or influence of another or others, often referring to the sovereignty of a country.