In 2000, the S&P 500 Index Earned 11 Percent While

question 111

Multiple Choice

In 2000, the S&P 500 Index earned 11 percent while the T-bill yield was 4.4 percent. Given this information, which of the following statements is correct with respect to the market risk premium?

• A) The market risk premium must have been negative.
• B) The market risk premium must have been positive.
• C) The market risk premium must have been zero.
• D) Unable to answer without more information.

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Definitions:

Understand the World

Refers to the cognitive process of comprehending, interpreting, and making sense of the complex reality around us.

Rep Test

The Repertory Grid Technique, a tool for exploring the ways individuals classify and interpret their world, often used in personal construct psychology.

Precarious Assumptions

Risky or uncertain beliefs that are accepted without solid evidence or secure foundations.

Constructs Listed

The specified elements or variables within a study or theory that have been identified for analysis or measurement.