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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- 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 returnMarket's Risk premium measures Select one: a. The market return plus the risk free rate. b. The risk free rate and market portfolio rate of return c. The risk free rate plus the risk premium d. The change in the risk free rate and the market return e. The difference between return on market portfolio and risk-free rateRm-R is read as: O a. The return offered by the market over and above the risk-free rate O b. Market risk premium- Oc. Excess return on the market C. Od. All options are correct
- The additional return over the risk-free rate needed to compensate investors for assuming an average amount of risk. a. Market Risk Premium b. Risk-free rate С. Stock's beta O d. Security Market Line e. Required Return on StockWhich of the following is included inthe risk-free rate? O A. the default premium O B. the expected inflation premium O C. the liquidity premium O D. the maturity premium O E. All of the above are included in the risk-free rate. Reset Selectionb) Give a graphical example to present the positioning of. E Systematic risk E Risk free rate of returm E Market rate of return, and E Risk premium.
- The Capital Asset Pricing Model (CAPM) asserts that an asset’s expected return is equal to the risk-free rate plus a risk premium for: a. Volatility b. Systematic risk c. Non-systematic risk d. Diversification e. Marginal utility of consumptionWhat is definitions of this? Systematic risk Risk free rate of return Market rate of return, and Risk premium.risk premium (RP) expected return on a portfolio,r^P realized rate of return, r¨ diversification correlation coefficient, ρρ firm-specific (diversifiable) risk market (nondiversifiable) risk relevant risk beta coefficient, ββ capital asset pricing model (CAPM) security market line (SML) market risk premium (RPM) equilibrium Define all terms
- The slope of the Security Market Line equals to ____, and the slope of Capital Allocation Line equals to____. Select one: A. Beta; Sharpe Ratio B. Market Risk Premium; Sharpe Ratio C. Risk free rate; Volatility D. Market Risk Premium; VolatilityThe risk associated with the overall market is referred to as _____ risk. a. unsystematic b. diversified c. portfolio d. systematicAn efficient capital market is best defined as a market in which security prices reflect which one of the following? Multiple Choice A Current inflation B A risk premium C All available information D The historical arithmetic rate of return E The historical geometric rate of return