An investment with a return of 9.5 percent,while the government rate for a similar investment is 3.5 percent,has a 6 percent risk premium.

Question

Quizplus · Accepted Answer

The risk premium is the difference between the rate of return on an investment and the government rate for a similar investment. In this case, the investment has a return of 9.5 percent and the government rate is 3.5 percent, resulting in a 6 percent risk premium (9.5% - 3.5% = 6%). Therefore, the statement is true.

An Investment with a Return of 9