The Total Annual Returns on Large Company Common Stocks Averaged

question 46

Multiple Choice

The total annual returns on large company common stocks averaged 11.8% from 1926 to 2009 small company stocks averaged 16.6%,long-term government bonds averaged 5.8%,while Treasury Bills averaged 3.7%.What was the average risk premium earned by long-term government bonds and small company stocks,respectively?

• A)1.8%; 11.9%
• B)2.1%; 12.9%
• C)4.4%; 13.9%
• D)9.5%; 1.8%
• E)None of the above.