If the Average Return on Common Stocks Was 13

question 36

Multiple Choice

If the average return on common stocks was 13.3%, the average Treasury bill rate was 3.8%, and the average inflation rate was 3.2% what would be the expected nominal and approximate real market return for common stocks if the Treasury bill rate is expected to be 5.5% and the inflation rate is 4.1%?

• A) 9.5%, 13.6%.
• B) 13.6%, 9.5%.
• C) 15.90%, 10.9%.
• D) 14.6%, 9.1%.

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