The excess return earned by an asset that has a beta of 1.0 over that earned by a risk- free asset is referred to as the:
A)market rate of return.
B)systematic return.
C)market risk premium.
D)real rate of return.
E)total return.

Question

Quizplus · Accepted Answer

The difference in return between a risky asset with a beta of 1.0 and a risk-free asset is referred to as the market risk premium. This represents the additional return that investors demand for taking on the risk associated with investing in the stock market.

The Excess Return Earned by an Asset That Has a Beta