Over the period of 1926-2008: the risk premium on large-company stocks was greater than the risk premium on small- company stocks. U. S. Treasury bills had: a) the risk premium that was just slightly over 2 percent. b) the risk premium on long-term government bonds was zero percent. c) the risk premium on stocks exceeded the risk premium on bonds. d) U. S. Treasury bills had a negative risk premium.

The following pertains to smoke, inc.’s investment in debt securities: on december 31, year 3, smoke reclassified a security acquired during the year for $70,000. it had a $50,000 fair value when it was reclassified from trading to available-for-sale. an available-for-sale security costing $75,000, written down to $30,000 in year 2 because of an other-than-temporary impairment of fair value, had a $60,000 fair value on december 31, year 3. what is the net effect of the above items on smoke’s net income for the year ended december 31, year 3?