We know that during the last 10 years, the average historical return on a market index is 15%. We also know that the average inflation rate and average risk-free rate over the last 10 years are 3% and 6%, respectively. What is the real risk premium using the exact Fisher equation? Select one: a. 2.94% b. 6.86% c. 7.92% d. 8.74% e. 10.75%
We know that during the last 10 years, the average historical return on a market index is 15%. We also know that the average inflation rate and average risk-free rate over the last 10 years are 3% and 6%, respectively. What is the real risk premium using the exact Fisher equation? Select one: a. 2.94% b. 6.86% c. 7.92% d. 8.74% e. 10.75%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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We know that during the last 10 years, the average historical return on a market index is 15%. We also know that the average inflation rate and average risk-free rate over the last 10 years are 3% and 6%, respectively. What is the real risk premium using the exact Fisher equation?
Select one:
a. 2.94%
b. 6.86%
c. 7.92%
d. 8.74%
e. 10.75%
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