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Problem: You invested in long-term corporate bonds and earned 6.1 percent. During that same time period, large-company stocks returned 12.6 percent, long-term government bonds returned 5.7 percent, U.S. Treasury bills returned 4.2 percent, and inflation averaged 3.8 percent.

Required: What average risk premium did you earn? Support your statements with examples

  • 1.3%
  • 1.9%
  • 6.5%.
  • 4%
  • 2.3%

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