At a Minimum,which of the Following Would You Need to Know

question 47

Multiple Choice

At a minimum,which of the following would you need to know to estimate the amount of additional reward you will receive for purchasing a risky asset instead of a risk-free asset?
I.asset's standard deviation
II.asset's beta
III.risk-free rate of return
IV.market risk premium

• A)I and III only
• B)II and IV only
• C)III and IV only
• D)I, III, and IV only
• E)I, II, III, and IV

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Definitions:

Limited Economic Resource

A scarcity or limitation of resources that possess utility or value, which restricts their availability for use in production, consumption, or investment.

Mutually Exclusive

Situations or events that cannot occur at the same time, often used in decision-making scenarios where the choice of one option precludes the selection of another.

Independent

Characterized by freedom from outside control or influence; self-governing.

Marginally Profitable

Referring to a business or product that generates minimal profits, just above the break-even point but not significant in scale.