Since the Market Return Represents the Expected Return on an Average

question 101

True/False

Since the market return represents the expected return on an average stock, the market return reflects a certain amount of risk.As a result, there exists a market risk premium, which is the amount over and above the risk-free rate, that is required to compensate stock investors for assuming an average amount of risk.

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Definitions:

Canadian Goose

A large wild goose species with a distinctive black head and neck, white cheeks, and a brown body, native to arctic and temperate regions of North America.

Quotients

The results of dividing one quantity by another.

Ratios

A mathematical expression that compares two or more numbers, showing the relative size of one quantity to another.

Totals

The sum or aggregate amount resulting from the addition of individual elements, numbers, or variables.