The Term Excess Returns Is Commonly Defined As

question 36

Multiple Choice

The term excess returns is commonly defined as:

• A)total portfolio returns, minus the market rate.
• B)total portfolio returns, minus the risk-free rate.
• C)(portfolio returns minus the risk-free rate) divided by beta.
• D)None of the above

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Definitions:

Graphical Approach

A method of solving problems or representing data using diagrams, charts, or graphs.

CVP Analysis

Cost-Volume-Profit Analysis, a management accounting methodology used for understanding the relationship between costs, volumes of sales, and profit.

Variable Cost

Costs that vary in proportion to the level of activity or volume of production in a business.

Annual Fixed Costs

Expenses that a business incurs that do not fluctuate with changes in production level or sales volume, such as rent or salaries, benchmarked on a yearly basis.