Assume that during a 7-year period,inflation averaged 2.8 percent,U.S.Treasury bill yields averaged 3.3 percent,and long-term government bond yields averaged 5.9 percent.What was the average rate of return on long-term corporate bonds if they commanded a risk premium of 0.2 percent more than the long-term government bonds?
A)9.2%
B)8.9%
C)5.7%
D)6.1%
E)9.4%

Question

Quizplus · Accepted Answer

Long-term corporate bond yield = 5.9% + 0.2% = 6.1%

Assume That During a 7-Year Period,inflation Averaged 2