1. Risk free rate represents: a. The market rate of return b. The rate provided by long term government securities c. Beta d. The rate provided by short term government securities 2. The market risk premium is measured by: a. T-bill rate. b. market return less risk-free rate. c. beta. d. standard deviation. 3. A stock with a beta of one would be expected to have a rate of return equal to a. the market risk premium b. the risk-free rate c. the market rate of return d. zero
1. Risk free rate represents: a. The market rate of return b. The rate provided by long term government securities c. Beta d. The rate provided by short term government securities 2. The market risk premium is measured by: a. T-bill rate. b. market return less risk-free rate. c. beta. d. standard deviation. 3. A stock with a beta of one would be expected to have a rate of return equal to a. the market risk premium b. the risk-free rate c. the market rate of return d. zero
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 21P
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1. Risk free rate represents:
a. The market rate of return
b. The rate provided by long term government securities
c. Beta
d. The rate provided by short term government securities
2. The market risk premium is measured by:
a. T-bill rate.
b. market return less risk-free rate.
c. beta.
d. standard deviation.
3. A stock with a beta of one would be expected to have a rate of return equal to
a. the market risk premium
b. the risk-free rate
c. the market rate of return
d. zero
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