Homework answers / question archive / The risk premium for an investment is 3 percent

The risk premium for an investment is 3 percent

Finance

Share With

The risk premium for an investment is 3 percent. The inflation premium is 4 percent. If the pure rate of interest in the market is 3.0 percent, what should be the yield on a risk-free security? Use exact formulation.

A. 8.16%

B. 6.60%

C. 6.08%

D. 9.72%

E. 9.20%

F. 7.64%

G. 8.68%

H. 7.12%