The market risk premium can be defined as the:
A) Return on the market plus the risk-free rate of return.
B) Amount of return received for accepting unsystematic risk.
C) Beta multiplied by the risk-free rate of return.
D) Slope of the market portfolio's security market line.
E) Intercept point of the security market line.

Question

Quizplus · Accepted Answer

The market risk premium is the slope of the security market line, representing the additional return expected from holding a risky market portfolio instead of risk-free assets.

The Market Risk Premium Can Be Defined as The