Which One of the Following Statements Is Correct

question 103

Multiple Choice

Which one of the following statements is correct?

• A) The unexpected return is always negative.
• B) The expected return minus the unexpected return is equal to the total return.
• C) Over time, the average return is equal to the unexpected return.
• D) The expected return includes the surprise portion of news announcements.
• E) Over time, the average unexpected return will be zero.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, often represented as an annual percentage rate of the principal.

Current Ratio

The current ratio is a liquidity metric that measures a company's ability to pay off its short-term liabilities with its short-term assets.

Note Receivable

A written promise that amounts will be received by the person holding the note, usually involving interest.

Return Ratio

A financial metric used to measure the efficiency or profitability of an investment, calculated by dividing the gain (or loss) from the investment by its cost.