The market has an expected rate of return of 12.4%. Long-term government bonds are expected to yield 6.8% and Treasury bills are expected to yield 4.2%. The inﬂation rate is 3.8%. What is the
Market risk premium?
A) 5.6%
B) 6.4%
C) 8.2%
D) 8.6%
E) 11.0%

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The Answer of The market has an expected rate of return of 12.4%. Long-term government bonds are expected to yield 6.8% and Treasury bills are expected to yield 4.2%. The inﬂation rate is 3.8%. What is the
Market risk premium?
A) 5.6%
B) 6.4%
C) 8.2%
D) 8.6%
E) 11.0%

The Market Has an Expected Rate of Return of 12