Expected Returns Are

question 23

Multiple Choice

Expected returns are:

• A) always positive.
• B) always greater than the risk-free rate.
• C) inherently unobservable.
• D) usually equal to actual returns.

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Definitions:

Incremental Value

The additional value generated by undertaking a specific action or investment compared to not doing so.

Shares Outstanding

The total number of shares of a company's stock that are currently owned by all its shareholders, including share blocks held by institutional investors and restricted shares.

Equity-Financed

A method of funding a company’s operations by issuing shares of stock to investors rather than borrowing money.

All-Stock Deal

A type of transaction where payment for a purchase is made entirely through the exchange of shares rather than cash.