The Market Risk Premium Is Computed By

question 79

Multiple Choice

The market risk premium is computed by:

• A) adding the risk-free rate of return to the inflation rate.
• B) adding the risk-free rate of return to the market rate of return.
• C) subtracting the risk-free rate of return from the inflation rate.
• D) subtracting the risk-free rate of return from the market rate of return.
• E) multiplying the risk-free rate of return by a beta of 1.0.

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Definitions:

Exchange Theory

A social psychological perspective positing that human relationships are formed and maintained based on negotiated exchanges and perceived benefits.

Violent Behavior

Violent Behavior entails actions that involve physical force intended to hurt, damage, or kill someone or something.

Benefits Outweigh

This phrase means the advantages or positive aspects of a situation are more significant than the disadvantages or negative aspects.

Illegal Drugs

Substances whose production, sale, or possession is prohibited by law.