The market portfolio of equities earned 14.7% in one year.Treasury bills earned 5.7%.What was the real risk premium on equities?
A)5.0%
B)6.5%
C)9.0%
D)12.2%
E)18.7%

Name: The market portfolio of equities earned 14.7% in one year.Treasury bills earned 5.7%.What was the real risk premium on equities? A)5.0% B)6.5% C)9.0% D)12.2% E)18.7%
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Question

Quizplus · Accepted Answer

The real risk premium on equities is calculated by subtracting the return on Treasury bills from the return on equities. Therefore, 14.7% - 5.7% = 9.0%.

The Market Portfolio of Equities Earned 14