The Term B X R_b Gives

question 51

Multiple Choice

The term B x r_b gives:

• A) total cost of debt per year.
• B) total cost of equity per year.
• C) unit cost of debt.
• D) unit cost of equity.
• E) weighted average cost of capital.

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Definitions:

Expected Rate of Return

The profit or loss one anticipates on an investment that has various known or expected rates of return.

Variance

The measurement of the spread between numbers in a data set, indicating how much the numbers diverge from the average.

Standard Deviation

A statistical measure that quantifies the amount of variation or dispersion of a set of values, often used in finance to assess the volatility of an investment.

Certainty Equivalent Rate

The certain return providing the same utility as a risky portfolio.