Suppose that The Wall Street Journal announced that the current rate for one-year Treasury bills is 5%. The average return on large company common stocks for the period 1926 through 2009 was 11.8%.Given a risk-free rate of 5%, and average large company return of 11.8%, the risk premium attributable solely to the risk of large company stocks is 6.8%.Risk Premium=R-Rf= 11.8%- 5% = 6.8%.