The Market Portfolio of Common Stocks Earned 14

question 65

Multiple Choice

The market portfolio of common stocks earned 14.7% in one year. Treasury bills earned 5.7%. What was the real risk premium on equities?

• A) 5.0%
• B) 6.5%
• C) 9.0%
• D) 12.2%
• E) 18.7%

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Definitions:

Cross-Situational Consistency

The extent to which an individual's behavior and reactions are stable across different contexts and situations.

Coefficient

A numerical or constant quantity placed before and multiplying the variable in an algebraic expression.

Behaviors

Actions or reactions of an individual in response to external or internal stimuli.

Predict

To declare or indicate in advance; to forecast an event or outcome based on observation, experience, or scientific reasoning.