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:

Hydrogen Bond

A weak bond formed between a hydrogen atom in one molecule and an electronegative atom, such as oxygen or nitrogen, in another molecule, important in the structure of water and biological molecules.

Polar Covalent Bond

A type of chemical bond where a pair of electrons is unequally shared between two atoms.

Water Molecule

A chemical compound consisting of two hydrogen atoms bonded to one oxygen atom, essential for all known forms of life.

Hydrogen Atom

The simplest type of atom, consisting of one proton in the nucleus and one electron orbiting the nucleus, fundamental to the chemistry of life.