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Assume Inflation Averaged 1

Question 78

Multiple Choice

Assume inflation averaged 1.2 percent during a period in which U.S.Treasury bills earned 1.3 percent.What was the rate of return on large-company stocks if the risk premium on those stocks was 6.8 percent for the period?


A) 8) 1%
B) 8) 0%
C) 7) 9%
D) 9) 3%
E) 9) 2%

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