The Excess Return Required from a Risky Asset Over That

question 23

Multiple Choice

The excess return required from a risky asset over that required from a risk-free asset is called the:

• A) risk premium.
• B) geometric premium.
• C) excess return.
• D) average return.
• E) variancE.

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Definitions:

Total Stockholders' Equity

The total amount of funds contributed by investors and the accumulated earnings of a company, less any dividends paid.

Net Operating Income

A financial metric that calculates a company's profitability by subtracting operating expenses from operating revenues.

Book Value Per Share

A financial measure that calculates a company's net asset value divided by the number of outstanding shares.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues.