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The excess return earned by an asset that has a beta of 1.0 over that of a risk free asset is referred to as the:
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The excess return earned by an asset that has a beta of 1.0 over that of a risk free asset is referred to as the:

User Vijaysinh Parmar
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1 Answer

5 votes

Answer:

Market risk premium

Step-by-step explanation:

According to CAPM,

Required rate of return = risk free rate of return + (beta x market premium)

If beta is 1 ,

Required rate of return = risk free rate of return + (1 x market premium)

Required rate of return - risk free rate of return = market premium

User Niya
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