Use the Table for the Question(s)below

question 37

Multiple Choice

Use the table for the question(s) below.
Consider the following average annual returns:

-What is the risk premium for the S&P 500?

• A)5.7%
• B)7.0%
• C)0%
• D)8.4%
• E)4.5%

Acknowledge the role of macroeconomic factors, such as inflation, on investment returns and the risk-free rate.

Grasp the importance of diversifying among various types of investments to protect against economic uncertainty.

Understand the concept of diversification and how it impacts risk in investment portfolios.

Comprehend the basics of the Capital Asset Pricing Model (CAPM) and its relevance to determining expected returns on stocks.

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