The Excess Return Earned by an Asset That Has a Beta

question 60

Multiple Choice

The excess return earned by an asset that has a beta of 1.34 over that earned by a risk-free asset is referred to as the:

• A) market risk premium.
• B) risk premium.
• C) systematic return.
• D) total return.
• E) real rate of return.

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Definitions:

Cheat

Engaging in dishonest or unfair practices to gain an advantage, typically forbidden in rules or by law.

Cartel Policies

Strategies and rules established by a cartel, an association of independent businesses formed to control production, pricing, and marketing of goods, to maximize collective profits.

American Automobile Producers

Companies based in the United States that manufacture cars, trucks, and other vehicles.

Successful Collusion

An agreement between competing entities to control prices or market shares for mutual benefit, often regarded as illegal or unethical.