The Total Annual Returns on Large Company Common Stocks Averaged

question 39

Multiple Choice

The total annual returns on large company common stocks averaged 12.3% from 1926 to 2011,small company stocks averaged 17.4%,long-term government bonds averaged 5.8%,while Treasury Bills averaged 3.8%. What was the average risk premium earned by long-term government bonds,and small company stocks respectively?

• A) 1.8%; 13.3%
• B) 2.0%; 13.6%
• C) 4.4%; 11.9%
• D) 9.5%; 1.8%
• E) None of these.

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