Use the following data to answer Questions 27 through 30. An analyst observes the following historic geometric returns: Asset class Geometric Return Equities 0.08 Corporate Bonds 0.068 Treasury bills 0.025 Inflation rate 0.025 27 .

The real rate of return for equities is closest to:

A. 5.4%.

B. 5.8%.

C. 5.9%.

28. The real rate of return for corporate bonds is closest to:

A. 4.3%.

B. 4.2%.

C. 4.5%.

29. The risk premium for equities is closest to:

A. 5.4%.

B. 5.5%.

C. 5.6%. 30.

The risk premium for corporate bonds is closest to:

A. 3.9%.

B. 4.0%.

C. 4.3%.