Which One of the Following Is the Best Definition of the Term

question 35

Multiple Choice

Which one of the following is the best definition of the term 'expected return' as it applies to the concept of risk and return?

• A)the guaranteed return on a short-term treasury security which will be earned in the future
• B)the difference between the expected return on a risky asset and the expected rate of inflation
• C)the certain return on a risk-free asset which is going to be earned in the future
• D)the difference between the expected return on a risky asset and the certain return on a risk-free asset
• E)the return on a risky asset which is expected in the future

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Definitions:

Selling Price

The amount for which a product or service is sold to the customer, determined by factors like cost, market demand, and competitive pricing.

Margin Of Safety

The difference between actual sales and sales at the break-even point. It measures the extent to which sales can decline before a business incurs a loss.

Variable Costs

Expenditures that adjust in relation to the business's output or operational intensity.

Fixed Expenses

Costs that do not fluctuate with the volume of sales or production levels, remaining constant even as business activities change.