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Finance

Problem:

Investors require a 4 percent return on risk-free investments. On a particular risky investment, investors require an excess return of 7 percent in addition to the risk-free rate of 4 percent.

Required:

Question: What is this excess return called?

Risk premium
Average return
Required return
Real return

Note: Please describe comprehensively and provide step by step solution.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91174618

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