Risk Premium the Annual Return on the S&P 500 Index

question 111

Multiple Choice

Risk Premium The annual return on the S&P 500 Index was 12.4 percent.The annual T-bill yield during the same period was 5.7 percent.What was the market risk premium during that year?

• A)5.7 percent
• B)6.7 percent
• C)12.4 percent
• D)18.1 percent

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Definitions:

Infinite Patience

An extensive capacity to tolerate delays, obstacles, or suffering without becoming annoyed or anxious.

Self-Sacrifice

The act of giving up one's own interests, desires, or well-being for the benefit of others or for a cause.

Economic Liability

A financial obligation or debt that poses a potential cost to an individual or entity.

Industrialized Societies

Societies characterized by a high level of industrial development and a significant proportion of the population employed in the manufacturing and service sectors.