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Bob has been in three fights over the last two days. He lost all of them and was actually hurt quite badly the last time. As a result of losing, Bob will probably experience
Risk Premium
The additional return expected by an investor for taking on a higher level of risk compared to a risk-free investment.
Excess Returns
The return on an investment beyond the return expected from risk level, often used to assess performance.
Risk-free Asset
A theoretical financial instrument that promises a certain return with no risk of financial loss, often exemplified by government bonds.
Positively Skewed
Describes a distribution of data where the right tail (higher values) is longer than the left, indicating that a variable has more values that are significantly higher than the mean.
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