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Type of premium asked by investors for bearing risk on average...

This question belongs to Commerce Financial Management
Financial Management
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Type of premium asked by investors for bearing risk on average stock is classified as

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Correct Answer: Option B
Type of premium asked by investors for bearing risk on average stock is classified as market risk premium. The market risk premium is the difference between the expected return on a market portfolio and the risk-free rate. The market risk premium is equal to the slope of the security market line (SML), a graphical representation of the capital asset pricing model (CAPM).
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