The Additional Return Offered by a More Risky Investment Relative

question 75

Multiple Choice

The additional return offered by a more risky investment relative to a safer one is called

• A) the risk-free rate.
• B) the risky return.
• C) the risk premium.
• D) the insurance premium.

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Definitions:

Simultaneous Game

A game theory model where players make decisions or choose strategies at the same time, without knowledge of the others' choices.

Nash Equilibrium

A concept in game theory where each player's strategy is optimal, given the strategies of other players, leading to a situation where no player has anything to gain by changing only their own strategy.

Payoffs

The outcomes or returns from a particular strategy or action, often analyzed in game theory and economics.

Fight of the Century

commonly refers to iconic and highly anticipated boxing matches; the term can describe several historic bouts.