For the period 1926 to 2015,small-company stocks had an average return of 16.5 percent,U.S.Treasury bills returned 3.5 percent,and inflation averaged 3.0 percent.What was the risk premium on small-company stocks during this period?
A)12.5 percent
B)20.0 percent
C)13.0 percent
D)13.5 percent
E)10.0 percent

Question

Quizplus · Accepted Answer

Risk premium = 16.5% − 3.5% = 13.0%

For the Period 1926 to 2015,small-Company Stocks Had an Average