The Term Excess Return Refers to ________

question 71

Multiple Choice

The term excess return refers to ________.

• A) returns earned illegally by means of insider trading
• B) the difference between the rate of return earned and the risk-free rate
• C) the difference between the rate of return earned on a particular security and the rate of return earned on other securities of equivalent risk
• D) the portion of the return on a security that represents tax liability and therefore cannot be reinvested

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Definitions:

Quantitative Information

Data that can be measured or counted and expressed numerically, facilitating statistical analysis and comparisons.

Comparisons

The evaluation of similarities and differences between two or more items.

Line Chart

A type of chart that displays information as a series of data points connected by straight line segments.

Area Chart

A type of graph that represents quantities through the use of filled areas between lines and a baseline, often used to track changes over time.