The Expected Return on the Market Is the Risk-Free Rate

question 66

Multiple Choice

The expected return on the market is the risk-free rate plus the ________.

• A) diversified returns
• B) equilibrium risk premium
• C) historical market return
• D) unsystematic return

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Definitions:

Legal Tender

Currency that must be accepted if offered in payment of a debt, officially issued by a government or monetary authority.

Cryptocurrencies

Digital or virtual currencies that use cryptography for security and operate independently of a central bank, exemplified by Bitcoin and Ethereum.

Intermediaries

Entities or individuals that act as middlemen between different parties in a transaction, facilitating the exchange of goods, services, or information.

Electronic Currencies

digital forms of currency that exist electronically, such as cryptocurrencies, which are used for online transactions.