Which One of These Will Produce an Acceptable Estimate of the Value

question 52

Multiple Choice

Which one of these will produce an acceptable estimate of the value of the market risk premium?

• A)Historical rate of return on a market index
• B)Average rate of return on the S&P 500 plus the risk-free rate
• C)Dividend yield of the S&P 500 + Consensus forecast of future dividend growth - U.S.Treasury bill rate
• D)Total dividends paid by the S&P 500 firms for a 1-year period divided by the U.S.Treasury bill rate
• E)Rate computed using the CAPM and a beta of 1

---

Definitions:

Oral Stage

A term from Freudian psychoanalysis referring to the first stage of psychological development, where an infant's pleasure centers are in the mouth.

Identification

The process through which an individual aligns themselves with specific groups, values, or characteristics.

Superego

The superego is a component of Sigmund Freud's psychoanalytic theory, acting as the ethical component of the personality by providing moral standards by which the ego operates.

Oedipus Complex

A psychoanalytic theory introduced by Freud suggesting a child's unconscious sexual desire for the opposite-sex parent and jealousy towards the same-sex parent.