According to Investopedia, from 199x until 199y, big-company stocks earned a mean return of 12.34% whereas little-company stocks earned 17.25%. If the mean return on U.S. T-bills during this period was 2.53%, the risk premium on little-company stocks was a. 4.91% b. 19.78% c. 14.72% d. 11.78% e. 9.81%
According to Investopedia, from 199x until 199y, big-company stocks earned a mean return of 12.34% whereas little-company stocks earned 17.25%. If the mean return on U.S. T-bills during this period was 2.53%, the risk premium on little-company stocks was a. 4.91% b. 19.78% c. 14.72% d. 11.78% e. 9.81%
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 17P
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According to Investopedia, from 199x until 199y, big-company stocks earned a mean return of 12.34% whereas little-company stocks earned 17.25%. If the mean return on U.S. T-bills during this period was 2.53%, the risk premium on little-company stocks was
a. 4.91%
b. 19.78%
c. 14.72%
d. 11.78%
e. 9.81%
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