Question
In: Finance
Which of the following is generally considered to represent the risk-free return? A. common stocks B....
Which of the following is generally considered to represent the risk-free return?
A. common stocks
B. small stocks
C. long-term corporate bonds
D. treasury bills
Solutions
Expert Solution
Common stocks and small stocks represent high risk rate.
Long-term corporate bonds represent low risk rate compared to stocks.
Treasury bills has no risk which means they provide risk-free return because they are backed by the U.S Government.
Answer D
jeff jeffy answered 2 years agoRelated Solutions
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Stock B
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2% + 0.8(rM − rf)
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0.445
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