The Risk Premium Is Defined as the Rate of Return

question 44

Multiple Choice

The risk premium is defined as the rate of return on:

• A)a risky asset minus the risk-free rate.
• B)the overall market.
• C)a U.S. Treasury bill.
• D)a risky asset minus the inflation rate.
• E)a riskless investment.

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Definitions:

Merchandise

Merchandise refers to the goods that are bought and sold within a retail or wholesale environment.

Cash Discount

A reduction in the invoice price given by the seller to the buyer for quick payment within a specified period.

Merchandise

Products that a company buys to resell to its customers.

Cash Paid

The actual outflow of cash during a period for expenses, investments, and other financial activities.