The risk-free rate of return can be thought of as consisting of ____ and ____. a. unanticipated inflation; bond default premium b. a zero beta component; an expectation premium c. a real rate of return; an inflation premium d. a real rate of return; a default premium

The risk-free rate of return can be thought of as consisting of and . a. unanticipated inflation; bond default premium b. a zero beta component; an expectation premium c. a real rate of return; an inflation premium d. a real rate of return; a default premium

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 9MC

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QUESTION 35

The risk-free rate of return can be thought of as consisting of ____ and ____.

	a.	unanticipated inflation; bond default premium
	b.	a zero beta component; an expectation premium
	c.	a real rate of return; an inflation premium
	d.	a real rate of return; a default premium

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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