Problemyou expect the inflation rate to be 38 percent and, Ask an Expert

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Problem:

You expect the inflation rate to be 3.8 percent and the U.S. Treasury bill yield to be 3.9 percent for the next year. The risk premium on small-company stocks is 12.6 percent.

Required:

Question: What nominal rate of return do you expect to earn on small-company stocks next year?

15.5 percent
8.8 percent
9.2 percent
16.8 percent
16.5 percent

Note: Show all workings.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91147960

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