Use the Table for the Question(s)below

question 15

Multiple Choice

Use the table for the question(s) below.
Consider the following average annual returns:
-What is the excess return for the portfolio of small stocks?

• A)10.0%
• B)15.7%
• C)18.4%
• D)17.0%

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Definitions:

Discretionary

Pertaining to funds or spending that is subject to decision or choice by a party or authority.

Balanced Budget Amendment

A proposed federal constitutional rule requiring that the government not spend more than its income in a fiscal year.

Crowding-out Effect

A situation where increased government spending leads to reduced investment in the private sector.

Government Borrowing

The process by which governments finance their expenditures by issuing debt instruments, such as bonds, to the public or borrowing from financial institutions.