Which of the Following Is the Best Definition for the Concept

question 199

Multiple Choice

Which of the following is the best definition for the concept of risk premium?

• A) The excess return required from an investment in a risky asset over a risk-free investment.
• B) Market in which security prices reflect available information.
• C) A symmetric, bell-shaped frequency distribution that can be defined by its mean and standard deviation.
• D) The average compound return earned per year over a multi-year period.
• E) The hypothesis is that actual capital markets are efficient.