The Total Annual Returns on Large Company Common Stocks Averaged

question 56

Multiple Choice

The total annual returns on large company common stocks averaged 12.3% from 1926 to 2008, small company stocks averaged 17.4%, long-term government bonds averaged 5.8%, while Treasury Bills averaged 3.8%.What was the average risk premium earned by long-term government bonds, and small company stocks respectively?

• A)1.8%; 13.3%
• B)2.0%; 13.6%
• C)4.4%; 11.9%
• D)9.5%; 1.8%
• E)None of the above

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