Question: Please show all work and equations as needed. 9. Which one of the following had the highest risk premium for the period 1926-2005? A. Small

Please show all work and equations as needed. 9. Which one

Please show all work and equations as needed.

9. Which one of the following had the highest risk premium for the period 1926-2005? A. Small company bonds B. U.S. Treasury bills C. Large company bonds D. Large company stocks E. Small company stocks 10. You have been given this probability distribution for the holding-period return for GM stock: Stock of the Economy Boom Normal growth Recession Probability 0.40 0.40 0.20 HPR 30% 11% -10% What is the expected variance for GM stock? A. 200.00% B. 221.04% C. 246.37% D. 14.87%

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