The Term Excess Returns Is Commonly Defined As

question 36

Multiple Choice

The term excess returns is commonly defined as:

• A)total portfolio returns, minus the market rate.
• B)total portfolio returns, minus the risk-free rate.
• C)(portfolio returns minus the risk-free rate) divided by beta.
• D)None of the above

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Definitions:

Mutual Fund

An investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds.

Investment

The process of assigning funds or other resources with the aim of earning returns or profits.

Five-Year Period

A duration or span of time that lasts for five consecutive years.

Stock Valued

The process of determining the intrinsic value of a stock based on predictions of future earnings and the company's overall financial health.