The Risk-Free Rate Is 4

question 84

Multiple Choice

The risk-free rate is 4.35 percent. What is the expected risk premium on this security given the following information?

• A) 6.09 percent
• B) 6.54 percent
• C) 7.65 percent
• D) 7.87 percent
• E) 8.15 percent

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Definitions:

COBRA

The Consolidated Omnibus Budget Reconciliation Act, a U.S. law that provides individuals and their families the option to continue health insurance coverage after a job loss or other qualifying event.

Occupational Safety and Health Act

A United States law established in 1970 to ensure workplace safety and health standards.

Workplace Safety

Practices and policies implemented to ensure the physical and emotional well-being of employees in their working environment.

ERISA

The Employee Retirement Income Security Act of 1974, a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry.