The Market Risk Premium Is Computed By

question 41

Multiple Choice

The market risk premium is computed by:

• A) Adding the risk-free rate of return to the inflation rate.
• B) Adding the risk-free rate of return to the market rate of return.
• C) Subtracting the risk-free rate of return from the inflation rate.
• D) Subtracting the risk-free rate of return from the market rate of return.
• E) Multiplying the risk-free rate of return by a beta of 1.0.

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Definitions:

Desertification

The transformation of productive soil into desert, often due to factors like drought, the clearing of forests, or unsuitable farming practices.

Conservation Biology

Field of applied biology that surveys biodiversity and seeks ways to maintain and use it nondestructively.

Biodiversity

The variety and variability of life on Earth, encompassing the differences within species, between species, and the ecosystems in which they live.