If U.S. Treasury bills are earning 3 percent and the stock investment you are considering has...
If U.S. Treasury bills are earning 3 percent and the stock investment you are considering has a potential return of 7 percent, you would be paid a ____ percent return to take the additional risk of investing in the stock.
Homework Answers
THE RETURN PAID TO TAKE ADDITIONAL RISK OF INVESTING IN STOCK IS CALLED " RISK PREMIUM"
RISK PREMIUM = RETURN ON STOCK - RETURN O TREASURY BILLS
RISK PREMIUM = 7%-3% = 4%
ANSWER : 4% (Thumbs up please)
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