Which of the statements below is TRUE?
A) Inflation has averaged 1.18% over the past 50 years.
B) The real rate has averaged 4.05% over the past 50 years.
C) The default premium has averaged 7.05% over the past 50 years.
D) The maturity premium has averaged 1.28% (for twenty-year maturity differences) over the past 50 years.

Question

Quizplus · Accepted Answer

The maturity premium, which compensates investors for the increased risk of holding longer-term securities, has averaged around 1.28% for twenty-year maturity differences over the past 50 years.

Which of the Statements Below Is TRUE