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)market risk premium.
C)systematic return.
D)total return.
E)real rate of return.

Question

Quizplus · Accepted Answer

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 market risk premium. This is the additional return that investors demand for taking on the risk of investing in the broad market.

The Excess Return Earned by an Asset That Has a Beta