The Rate of Return on Which One of the Following

question 46

Multiple Choice

The rate of return on which one of the following has a risk premium of 0%?

• A)Long-term government bonds
• B)Long-term corporate bonds
• C)Intermediate-term government bonds
• D)U.S.Treasury bills
• E)Large-company stocks

---

Definitions:

Financial Capital

The money, credit, and other forms of funding that businesses use to invest in resources for future growth.

Opportunity Cost

Waiving prospective gains from various alternatives by settling on one option.

Foregone Alternative

The option or course of action that is given up when another is chosen; closely related to the concept of opportunity cost.

Opportunity Cost

The charge of rejecting the following prime opportunity in the process of decision-making.