The Excess Return You Earn by Moving from a Relatively

question 30

Multiple Choice

The excess return you earn by moving from a relatively risk-free investment to a risky investment is called the:

• A) geometric average return.
• B) inflation premium.
• C) risk premium.
• D) time premium.
• E) arithmetic average return.

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Definitions:

Tablespoons

A unit of volume measurement, typically used in cooking, equivalent to three teaspoons or about 15 milliliters.

Teaspoon

A unit of measure used in cooking, equivalent to about 5 milliliters, or a small spoon used for stirring and sipping.

Medication

Substances used to treat, prevent, or diagnose illnesses, ranging from over-the-counter drugs to prescription pharmaceuticals.