Question: Hello, I am having problems understanding this question. The market Risk Premium is supposed to be calculated by equity market return - risk-free rate. But

Hello, I am having problems understanding this question. The market Risk Premium is supposed to be calculated by equity market return - risk-free rate. But how should we calculate for this one? Could you please explain the answer to me? Thank you so much. ^_^

Given the following long-term historical information for returns for various types of securities, what would be your estimate of the Market Risk Premium? Small company stocks 15% Large company stocks 12% Long-term U.S. Treasury Bonds 5% U.S. Treasury Bills 3% O 3% O 5% O 7% O 9% O 10% O 12% O 15%

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