Over the past ten years,large-company stocks have returned an average of 9.8 percent annually,long-term corporate bonds have earned 4.6 percent,and U.S.Treasury bills have returned 3.0 percent.How much additional risk premium would you have earned if you had invested in large-company stocks rather than long-term corporate bonds over those ten years?
A) 1.7 percent
B) 3.7 percent
C) 5.2 percent
D) 5.8 percent
E) 8.1 percent

Question

Quizplus · Accepted Answer

Additional risk premium = (0.098 - 0.030) - (0.046 - 0.030) = 5.2 percent

Over the Past Ten Years,large-Company Stocks Have Returned an Average