This Is the Reward for Taking Systematic Stock Market Risk

question 12

Multiple Choice

This is the reward for taking systematic stock market risk.

• A) required return
• B) risk-free rate
• C) risk premium
• D) market risk premium

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Definitions:

Production Possibilities Frontier

A depiction that captures every maximum production possibility for two specific commodities, predicated on a range of inputs that includes resources and additional variables.

Opportunity Costs

The expense incurred from not selecting the next most favorable choice when a decision is taken or preferring one alternative over another.

Efficient

The characteristic of a resource allocation that maximizes the total surplus received by all members of society.

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two or more goods given a set of inputs (resources, technology, etc.), assuming efficient use of resources.