Consider the Following Average Annual Returns: What Is the Excess

question 46

Multiple Choice

Consider the following average annual returns: What is the excess return for the portfolio of small stocks?

• A) 11.7%
• B) 16.6%
• C) 19.5%
• D) 17.6%

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Definitions:

Increase in Demand

A situation where the quantity of a good or service that consumers are willing and able to purchase at a particular price rises.

Marginal Revenue

The additional revenue that a firm gains when it sells one more unit of a product or service.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the number of units produced.

Marginal Cost

The rise in production costs when one more unit of a product or service is produced.