The Excess Return Is Computed as The

question 35

Multiple Choice

The excess return is computed as the:

• A) return on a security minus the inflation rate.
• B) return on a risky security minus the risk-free rate.
• C) risk premium on a risky security minus the risk-free rate.
• D) risk-free rate plus the inflation rate.
• E) risk-free rate minus the inflation rate.

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Definitions:

Adjusted Trial Balance

A version of the trial balance that reflects account balances after adjustments are made for accruals, deferrals, and errors.

Unadjusted Trial Balance

A preliminary list of all accounts in the general ledger with their balances to check the equality of debits and credits before adjustments.

Contra Asset

An account on a company's balance sheet that reduces the value of a related asset account.

Balance Sheet

A financial statement that provides a snapshot of a company's assets, liabilities, and shareholders' equity at a specific point in time.