The term excess-return refers to ______________.
A) returns earned illegally by means of insider trading
B) the difference between the rate of return earned and the risk-free rate
C) the difference between the rate of return earned on a particular security and the rate of return earned on other securities of equivalent risk
D) the portion of the return on a security which represents tax liability and therefore cannot be reinvested

Question

Quizplus · Accepted Answer

Excess-return refers to the difference between the rate of return earned and the risk-free rate. It represents the additional return earned by taking on additional risk beyond that of the risk-free rate.

The Term Excess-Return Refers to ______________