Question: Below are the expected returns for different asset classes for next year: Asset class Exp. return T-bills 2.1% Corporate bonds 4.2% Small company stocks 18.5%

Below are the expected returns for different asset classes for next year:

Asset class Exp. return
T-bills 2.1%
Corporate bonds 4.2%
Small company stocks 18.5%
Large company stocks 10.4%

Part 1

What is the risk premium for corporate bonds?

Part 2

What is the risk premium for small company stocks?

Part 3

What is the risk premium for large company stocks?

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