The expected return on the market less the risk-free rate is best described as the:
A) beta.
B) profit.
C) market risk premium.
D) security market line (SML).

Question

Quizplus · Accepted Answer

The expected return on the market less the risk-free rate is known as the market risk premium. This measures the excess return that investors expect to earn from holding a risky market portfolio instead of risk-free assets.

The Expected Return on the Market Less the Risk-Free Rate