7. Which one of the following is defined as the average compounded return earned

Question

7. Which one of the following is defined as the average compounded return earned per year over a multiyear period?

A. Variance of returns

B. Arithmetic average return

C. Standard deviation of returns

D. Geometric average return

8. 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. What is this excess return called?

Risk premium

Required return

Average return

Real return

PLEASE ANSWER ALL QUESTIONS

Risk premium

Required return

Average return

Real return

Explanation / Answer

7. D- Geometric average return

8. A.Risk Premium

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