A Stock's Risk Premium Is Equal to The

question 46

Multiple Choice

A stock's risk premium is equal to the:

• A)expected market return times Beta.
• B)treasury bill yield plus expected market return.
• C)risk-free rate plus expected market risk premium.
• D)expected market risk premium times Beta.

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Definitions:

Political Goods

Services or benefits, such as security and safety, provided by a government to its citizens, which are non-exclusive and cannot be easily provided by the private sector.

Coercive Force

The use or threat of force to persuade someone to act in a certain way, often seen in legal or military contexts.

Private Firms

Businesses owned by private individuals or groups, as opposed to being publicly traded or government-owned.

Subsidies

Financial support extended by the government to companies, farmers, or consumers, often aimed at encouraging certain behaviors or reducing the price of essential goods.