Examlex
What is the expected return on equity for a firm with a 14% expected return on assets that pays 9% on its debt, which totals 70% of assets?
Risk Premium
The additional return expected from an investment for taking on a higher level of risk.
Holding Period
Refers to the duration of time an investment is held by an investor, impacting the tax treatment of any capital gains.
Reward-to-volatility Ratio
A measure used to determine the amount of return an investment provides relative to its risk, with higher ratios indicating better performance per unit of risk.
Capital Allocation Line
A graphical representation in finance showing risk-versus-return profiles of different portfolios, emphasizing the efficient diversification of assets.
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