Maturity premium / small stock risk premium
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Security Annual Percentage Return
U.S. government T-bills 7.56
Long-term government bonds 10.12
Long-term corporate bonds 11.64
Large capitalization common stocks 13.23
Small capitalization common stocks 15.46
What is the maturity premium?
Use same data as above. What is the small firm stock risk premium?
Please show calculations.
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Solution Summary
The solution thoroughly explains the calculation of maturity and small stock risk premiums. The solution is 126 words in length, and it describes in a step-by-step fashion how to tackle and calculate problems with regards to not only maturity premium, but also small firm stock risk premiums.
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What is the maturity premium?
The maturity premium is the difference between the U.S. government T-Bills and the Long-term government bonds. The reason is that these are government ...
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