The Excess Return Earned by an Asset That Has a Beta

question 350

Multiple Choice

The excess return earned by an asset that has a beta of 1.0 over that earned by a risk-free asset is referred to as the:

• A) Market rate of return.
• B) Market risk premium.
• C) Systematic return.
• D) Total return.
• E) Real rate of return.

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Definitions:

Preemption

A legal doctrine that allows federal law to take precedence over state laws in cases where both governments have enacted competing laws or policies.

Police Power

The capacity of a state to regulate behaviors and enforce order within its territory, mainly in areas concerning health, safety, and morals.

General Revenue Sharing

A form of federal monetary aid that is given to states and municipalities with minimal restrictions on how it can be spent.

Means Testing

A procedure to determine eligibility for certain forms of financial aid or social services based on the income and assets of an applicant.