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

Here's a step-by-step explanation:

1. Beta is a measure of an asset's risk in relation to the market. A beta of 1.0 means the asset's price will move with the market.

2. The risk-free rate is the theoretical rate of return of an investment with zero risk. This is typically associated with the interest rate on a 3-month U.S. Treasury bill.

3. The market rate of return is the total return on the market as a whole.

4. The excess return of an asset over the risk-free rate is known as the risk premium.

5. Therefore, when an asset has a beta of 1.0, its excess return over the risk-free rate is referred to as the Market risk premium.

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

Here's a step-by-step explanation:

1. Beta is a measure of an asset's risk in relation to the market. A beta of 1.0 means the asset's price will move with the market.

2. The risk-free rate is the theoretical rate of return of an investment with zero risk. This is typically associated with the interest rate on a 3-month U.S. Treasury bill.

3. The market rate of return is the total return on the market as a whole.

4. The excess return of an asset over the risk-free rate is known as the risk premium.

5. Therefore, when an asset has a beta of 1.0, its excess return over the risk-free rate is referred to as the Market risk premium.

Knowee AI · Accepted Answer

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

Here's a step-by-step explanation:

1. Beta is a measure of an asset's risk in relation to the market. A beta of 1.0 means the asset's price will move with the market.

2. The risk-free rate is the theoretical rate of return of an investment with zero risk. This is typically associated with the interest rate on a 3-month U.S. Treasury bill.

3. The market rate of return is the total return on the market as a whole.

4. The excess return of an asset over the risk-free rate is known as the risk premium.

5. Therefore, when an asset has a beta of 1.0, its excess return over the risk-free rate is referred to as the Market risk premium.

The excess return earned by an asset that has a beta of 1.0 over that earned by a riskfree asset is referred to as the:Market rate of return.Market risk premium.Total return.Real rate of return.

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