If a Portfolio Had a Return of 11%, the Risk-Free

question 18

Multiple Choice

If a portfolio had a return of 11%, the risk-free asset return was 6%, and the standard deviation of the portfolio's excess returns was 25%, the risk premium would be

• A) 14%.
• B) 6%.
• C) 35%.
• D) 21%.
• E) 5%.

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Definitions:

Financialization

The increasing influence of financial markets, institutions, and motives in the economy, affecting decision-making in businesses and governments.

Goods And Services

Goods are physical items that are sold or exchanged, while services are intangible activities or benefits that are provided.

Trade Barriers

Measures implemented by governments to restrict or control the exchange of goods and services across borders, such as tariffs and quotas.

Inefficient Industry

An economic sector that fails to utilize resources optimally, resulting in lower productivity and output.