If the expected return on the market is 11.5%,then using the historical risk premium on large stocks of 8.6%,the current risk-free rate is:
A)2.9%
B)7.4%
C)8.4%
D)10.6%
E)12.6%

Name: If the expected return on the market is 11.5%,then using the historical risk premium on large stocks of 8.6%,the current risk-free rate is: A)2.9% B)7.4% C)8.4% D)10.6% E)12.6%
Brand: Quizplus
Rating: 4.9 (35 reviews)

Question

Quizplus · Accepted Answer

The risk-free rate can be calculated by subtracting the historical risk premium from the expected return on the market: 11.5% - 8.6% = 2.9%.

If the Expected Return on the Market Is 11