ALL UNIVERSITIES AND SERVICE COMMISSIONS PAST PAPERS IN PAKISTAN: Re: ::: vuaskari.com ::: mgt411 problem plz reply me

Thursday, June 2, 2011

Market risk premium = Risky return - risk-free rate.

Treasuries are considered to be risk free as they are backed by the "full faith and credit" of the U.S. government. For this reason, we can use them as a proxy for the risk-free rate.

On Thu, Jun 2, 2011 at 10:56 AM, mc100203022 Muhammad Mohsan Sabir <mc100203022@vu.edu.pk> wrote:

Risk Premium = Risky return – Risk free return

= 16% - 7%

Risk Premium = 9%

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