The Expected Return on a Riskless Asset Is Greater Than

question 53

Multiple Choice

The expected return on a riskless asset is greater than zero due to

• A) an expected return for delaying consumption.
• B) an expected return for opportunity costs.
• C) an expected return for taxes.
• D) irrational investors who believe risk is always present.

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Definitions:

Standards

Preset criteria or benchmarks used to measure, compare, or judge quality, performance, or compliance.

Fully Efficient

Describes a state in which resources, including time, labor, and materials, are optimized to achieve maximum productivity and minimal waste in operations or processes.

Efficient Level

An operational state where a system or process operates at maximum capacity with the least waste of resources.

Ideal Standard

Ideal standard refers to a benchmark for perfection in manufacturing or service delivery that assumes no inefficiencies or wastage.