Question: You are also given the following table of average returns over the last 50 years: Stocks T-Bonds T-Bills Arithmetic Geometric Arithmetic GeometricArithmetic Geometric 0.117 0.109

You are also given the following table of average returns over the last 50 years: Stocks T-Bonds T-Bills Arithmetic Geometric Arithmetic GeometricArithmetic Geometric 0.117 0.109 0.063 0.058 0.041 0.037 If you were asked to compute the equity risk premium for Steel Products, using the historical approach, what would your best estimate be? The largest investor in Steel Products is the owner/founder who owns 20% of the stock. Is she also the marginal investor in this stock? If your answer is yes write 1 and if your answer is No write 2 in the box

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