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Based on the past 88 years, the inflation rate averaged 3.0% and the U.S. Treasury yield was 3.5%, and the historical risk premium on small company stocks 13.2%. If these averages hold, what nominal rate of return should you expect to earn on small company stocks over the next several years? A. 15.5% B. 16.7% C. 19.7% D. 13.5% E. 13.7%

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Financial Management, Finance

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