Which One of the Following Statements Is Correct When Treasury

question 104

Multiple Choice

Which one of the following statements is correct when Treasury bills yield 7.5% and the market risk premium is 9.5%?

• A) The S&P 500 would be expected to return 8.50%.
• B) The S&P 500 would be expected to return 9.50%.
• C) The S&P 500 would be expected to return 12.68%.
• D) The S&P 500 would be expected to return 17.00%.

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Definitions:

Two-month Interval

A period or span of time extending for two months or roughly sixty days.

Test-retest Reliability

A measure of consistency where a test is given to the same individuals at two different points in time to assess the stability of their scores.

Norms

Established rules or standards of behavior that are expected to be followed within a society or group.

Criterion-related Validity

The extent to which a test predicts or correlates with a specific outcome or behavior it is designed to measure.