Which one of the following statements is correct when Treasury bills yield 7.5% and the market risk premium is 9.5%?
A) The S&P 500 would be expected to return 8.50%.
B) The S&P 500 would be expected to return 9.50%.
C) The S&P 500 would be expected to return 12.68%.
D) The S&P 500 would be expected to return 17.00%.

Question

Quizplus · Accepted Answer

E(R) = 7.5% + 1(9.5%) = 17%

Which One of the Following Statements Is Correct When Treasury