Multiple Choice
Suppose that over the last 30 years,company ABC has averaged a return of 10%.Over the same period,the Treasury bond rate has averaged 3%.The current estimate of the Treasury bond rate is 5%.Using the historical approach,what is the estimate of ABC's expected return.
A) 13.0%
B) 12.5%
C) 12.0%
D) 11.0%
Correct Answer:
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