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"The average annual return on the Standard and Poor's 500 Index from 1986 to 1995 was 17.6 percent. The average annual T-bill...

"The average annual return on the Standard and Poor's 500 Index from 1986 to 1995 was 17.6 percent. The average annual T-bill yield during the same period was 9.8 percent. what was the market risk during these 10 years?

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Answer #1
Average annual return stated as 17.6%
T-bill yield which is the risk free rate is 9.8%
Market Risk = 17.6% - 9.8%
Market Risk is 7.80%
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