单选题 Jeffery Marian, an analyst with Arlington Machinery, is estimating a country risk premium to include in his estimate of the cost of equity for a project Arlington is starting in India. Marian has compiled the following information for his analysis:
Indian 10-year government bond yield=7.20%.
10-year U. S. Treasury bond yield =4.60%.
Annualized standard deviation of the Bombay Sen stock index =40%.
Annualized standard deviation of Indian dollar denominated 10-year government bond=24%.
Annualized standard deviation of the S&P 500 Index = 18%.
The estimated country risk premium for India based on Marian's research is closest to:
  • A. 5.8%.
  • B. 2.6%.
  • C. 4.3%.
【正确答案】 C
【答案解析】072 - 0.046 ) × (0.40/0.24) = 0.043, or 4.3 %.