What Is the Amount of the Risk Premium on a U.S.Treasury

question 54

Multiple Choice

What is the amount of the risk premium on a U.S.Treasury bill if the risk-free rate is 2.8 percent and the market rate of return is 8.35 percent?

• A)0.00 percent
• B)2.80 percent
• C)5.55 percent
• D)8.35 percent
• E)11.15 percent

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Definitions:

Combustible Material

Any material that can ignite and burn, either freely or under specific conditions.

Kindling Point

The temperature at which a material ignites and starts burning.

Symbolic Form

A representation of statements or propositions using symbols to make logical relationships more clear.

Burning

The process of combustion, characterized by the emission of heat and light, often resulting in the transformation or destruction of materials.