The Expected Risk Premium on a Security Is Computed by

question 68

Multiple Choice

The expected risk premium on a security is computed by

• A) Subtracting the security's expected return from the risk-free rate
• B) Subtracting the expected market return from the security's expected return
• C) Subtracting the risk-free rate from the security's expected return
• D) Adding the security's expected return to the risk-free rate
• E) Adding the security's expected return to the expected return on the market

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Definitions:

Occupational Licensing

The requirement to obtain certification to demonstrate competency in a profession before being allowed to legally perform certain jobs.

Unnecessary Requirements

Stipulations or conditions imposed in a context (like a job or product use) that are not essential for its primary function or purpose.

Excessive Requirements

Unreasonably high or unnecessary conditions or stipulations imposed, often making processes or achievements difficult to attain.

Unions

Organizations formed by workers from related sectors that work towards securing better pay, benefits, and working conditions for their members.