Write the Correct Meaning for MBC

question 36

Short Answer

Write the correct meaning for MBC:

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Definitions:

Required Rate of Return

The required rate of return is the minimum expected return an investor demands for holding a risky investment, compensating for the risk taken.

Beta

A measure of a stock's volatility in relation to the overall market, used in the capital asset pricing model to determine expected returns.

Market Risk Premium

The extra earnings an investor foresees from holding a risky market portfolio in comparison to risk-free assets.

Risk-Free Rate

The theoretical return on investment with no risk of financial loss, typically represented by the yield on government bonds like U.S. Treasury securities.