The market risk premium represents the expected difference between:
A) the return on AAA bonds and Treasury bonds.
B) the prime rate and the 3-month Treasury bill rate.
C) the return on the stock market and the return on preferred shares.
D) the return on the stock market investment and the risk-free return.
Correct Answer:
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Q44: By definition the market portfolio has a
Q45: The CAPM incorporates the risk-free rate with
Q46: The rate on 3-month Treasury Bills is
Q47: A firm with a beta of 2.0
Q48: Unlike bonds or preferred shares,common equity does
Q50: The cost of equity is usually estimated
Q51: The thirty firms that comprise the Dow
Q52: In the context of the CAPM and
Q53: In the constant growth dividend model for
Q54: Market values for equity are calculated as:
A)the
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