The Excess Return Required on a Risky Asset Over That

question 109

Multiple Choice

The excess return required on a risky asset over that earned on a risk-free asset is called a:

• A) Risk premium.
• B) Return premium.
• C) Excess return.
• D) Average return.
• E) Variance.

---

Definitions:

Sales Revenues

The total amount of money generated from the sale of goods or services before any expenses are subtracted.

Leverage

A means of gaining a strategic advantage through the use of a particular resource or capability.

Profitability

The state or condition of yielding financial profit or gain, typically measured over a specific period of time.

Use Of Debt

The practice of borrowing funds to finance activities, investments, or purchases, often as a strategic financial decision.