The amount by which the expected return on a risky asset exceeds the return on an otherwise comparable safe asset is known as the
A)CDS spread.
B)risk premium.
C)VIX.
D)term spread.

Question

Quizplus · Accepted Answer

The amount by which the expected return on a risky asset exceeds the return on an otherwise comparable safe asset is known as the risk premium. It compensates investors for taking on additional risk associated with the investment. The other options - CDS spread, VIX, and term spread - are all related to different aspects of financial markets but do not directly refer to the excess return on a risky asset.

The Amount by Which the Expected Return on a Risky