The difference between the expected return in the market and the riskfree rate is called:
A) The market risk premium.
B) The market price of risk.
C) The risk premium.
D) The market sensitivity index.
E) a and b.

Question

Quizplus · Accepted Answer

The difference between the expected return in the market and the risk-free rate is referred to as both the market risk premium and the market price of risk. These terms describe the extra return investors expect to receive for taking on the additional risk of investing in the market over a risk-free asset.

The Difference Between the Expected Return in the Market and the Riskfree