The return on a Government of Canada T-Bill is 2.43%. Given a market risk premium of...
The return on a Government of Canada T-Bill is 2.43%. Given a market risk premium of 2.35%. What is the return on the market? (answer as a percentage)
Homework Answers
Market risk premium = Market return - Risk free rate
Given: Market risk premium = 2.35%, Risk free rate = T- Bill rate = 2.43%
Putting these values in the above equation, we get,
2.35 = Market return - 2.43
Market return = 2.35 + 2.43 = 4.78%
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