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The average annual return on the S&P 500 Index from 1996 to 2005 was 17.07 percent....

The average annual return on the S&P 500 Index from 1996 to 2005 was 17.07 percent. The average annual T-bill yield during the same period was 4.07 percent. What was the market risk premium during these ten years?

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Answer #1

Average market risk premium = 17.07% − 4.07% = 13.00%

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