The Excess Return Is the Difference Between the Average Return

question 38

Multiple Choice

The excess return is the difference between the average return on a security and the average return for ________.

• A) Treasury bonds
• B) a portfolio of securities with similar risk
• C) a broad-based market portfolio like the S&P 500 index
• D) Treasury bills

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Definitions:

Collect Like Terms

In algebra, to combine terms that have the same variables raised to the same power.

Simplify

To make (something) simpler or easier to understand or do.

Expression

In mathematics, a combination of symbols that represent a quantity or a relationship between quantities.

Simplify

To make something easier to understand or do.