Final answer:
The correctness of the statement regarding the risk premium range of 5 percent to 8 percent cannot be determined without additional context.
Step-by-step explanation:
The statement that a reasonable range for the risk premium in the United States is 5 percent to 8 percent cannot be verified as true or false without additional context or reference to a specific piece of literature or study. Risk premium refers to the excess return an investor requires for choosing a risky investment over a risk-free one. According to the provided information, there is a belief that a high-risk investment must have a high return to compensate for the risk, which aligns with the historical trend of stocks having higher returns compared to bonds and savings accounts due to their higher risk. However, this does not explicitly state what the reasonable range for the risk premium is.
Point 6 in the reference demonstrates a calculation of simple interest, where the principal amount, interest rate, and time are used to determine the future value of an investment. This formula is key in understanding how investments grow over time but doesn't directly address the risk premium range in question.