The Term Excess-Return Refers to ______________

question 15

Multiple Choice

The term excess-return refers to ______________.

• A) returns earned illegally by means of insider trading
• B) the difference between the rate of return earned and the risk-free rate
• C) the difference between the rate of return earned on a particular security and the rate of return earned on other securities of equivalent risk
• D) the portion of the return on a security which represents tax liability and therefore cannot be reinvested

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Definitions:

National Income

The total value of all goods and services produced by a country's economy over a specific period, often used as a measure of economic health.

Wages

Financial compensation paid by an employer to an employee for their labor, typically calculated on an hourly, daily, or piecework basis.

Salaries

Regular payments made to employees for their labor, typically on a monthly or biweekly basis, not directly related to the specific hours worked.

Fringe Benefits

Additional benefits, beyond a base salary or wages, provided to employees, such as health insurance, pensions, or company cars.