The Market Has an Expected Rate of Return of 9

question 103

Multiple Choice

The market has an expected rate of return of 9.8 percent.The long-term government bond is expected to yield 4.5 percent and the U.S.Treasury bill is expected to yield 3.4 percent.The inflation rate is 3.1 percent.What is the market risk premium?

• A)2.2 percent
• B)3.3 percent
• C)5.3 percent
• D)6.4 percent
• E)6.7 percent

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Definitions:

Infidelity

The act of being unfaithful to a spouse or partner, typically referring to sexual relationships outside of the agreed-upon boundaries of a relationship.

Self-actualizing

The process of realizing one's full potential, as per Abraham Maslow's hierarchy of needs, emphasizing creativity, growth, and personal development.

Maslow

An American psychologist who created the hierarchy of needs, a theory in psychology concerning human motivation based on prioritized needs.

Spontaneous

Occurring without apparent external cause; impromptu or unplanned.