Which of the Following Will Increase the Expected Risk Premium

question 39

Multiple Choice

Which of the following will increase the expected risk premium for a security, all else constant?
I. an increase in the security's expected return
II. a decrease in the security's expected return
III. an increase in the risk-free rate
IV. a decrease in the risk-free rate

• A)I only
• B)III only
• C)IV only
• D)I and IV only
• E)II and III only

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Definitions:

Fatty Cushion

A layer of fat that provides protection and cushioning to parts of the body, acting as a shock absorber and insulator.

Stricture

The narrowing of an opening, tube, or canal, such as the urethra or esophagus.

Passageway

A route or path that allows access from one place to another, often used in the context of anatomical structures or buildings.

Movement

The act or process of changing physical location or position by people or objects.