Ask Question
15 December, 11:06

2 - The market has an expected rate of return of 11.2 percent. The long-term government bond is expected to yield 5.8 percent and the U. S. Treasury bill is expected to yield 3.9 percent. The inflation rate is 3.6 percent. What is the market risk premium

+4
Answers (1)
  1. 15 December, 11:12
    0
    7.30%

    Explanation:

    Data provided in the question

    Expected rate of return = 11.2 percent

    Long term government bond yield = 5.8 percent

    U. S treasury bill yield = 3.9 percent

    Inflation rate = 3.6 percent

    So, the market risk premium is

    Market risk premium = Expected return of return - U. S treasury bill yield

    = 11.20% - 3.90%

    = 7.30%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “2 - The market has an expected rate of return of 11.2 percent. The long-term government bond is expected to yield 5.8 percent and the U. S. ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers