The Risk-Free Rate Is 4

question 56

Multiple Choice

The risk-free rate is 4.20 percent.What is the expected risk premium on this stock given the following information?

• A)5.85 percent
• B)6.59 percent
• C)8.22 percent
• D)10.16 percent
• E)11.21 percent

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Definitions:

Government

The organization or system through which a community or nation is managed and regulated.

Flood-control Projects

Initiatives aimed at managing or preventing the overflow of rivers, lakes, or oceans, to protect land and property.

Economic Grounds

The basis or rationale for decisions and actions based on economic factors, such as cost, benefits, and economic efficiency.

Highway Programs

Government initiatives aimed at the construction, maintenance, and expansion of road networks for public use.