The Market Has an Expected Rate of Return of 10

question 112

Multiple Choice

The market has an expected rate of return of 10.8%.The long-term government bond is expected to yield 4.5% and the U.S.Treasury bill is expected to yield 3.4%.The inflation rate is 3.1%.What is the market risk premium?

• A)2.2%
• B)3.3%
• C)5.3%
• D)6.4%
• E)7.4%

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Definitions:

Cnidarians

A diverse group of aquatic animals that includes corals, jellyfish, sea anemones, and hydras, characterized by their radial symmetry and cnidocytes, special cells used for capturing prey.

Ectoderm

The outermost layer of cells in the embryo of a multicellular organism, from which the nervous system, skin, and various sensory organs develop.

Hydrostatic Skeleton

A type of skeleton found in some invertebrates in which contracting muscles push against a tube of fluid.

Asexual Reproduction

The process by which an organism creates a genetically identical copy of itself without the involvement of another organism.