The Expected Return on a Security in the Market Context

question 22

Multiple Choice

The expected return on a security in the market context is:

• A) a negative function of execs security risk.
• B) a positive function of the beta.
• C) a negative function of the beta.
• D) a positive function of the excess security risk.
• E) independent of beta.

---

Definitions:

Holding Period

The length of time an investment is held before being sold, which can affect the capital gains tax owed upon sale.

FMV

Fair Market Value, the price at which property would change hands between a willing buyer and a willing seller, neither being under compulsion to buy or sell.

Distribution

The payment of dividends or assets to shareholders or partners from a corporation, partnership, or another type of entity.

Partnership

A type of business structure where two or more people share ownership, as well as the responsibility for managing the business and the income or losses it generates.