Chapter 12 Flashcards
1
Q
What are the lessons from capital market history?
A
There is a reward for bearing risk and the greater the potential reward, the greater the risk (risk-return trade-off)
2
Q
What is the Total Dollar Return?
A
Income from investment + capital gain (loss) due to change in price
3
Q
What is a risk premium?
A
The extra return for taking on risk. The return over and above the risk-free rate.
4
Q
A
