CHAPTER 12Some Lessons from Capital Market HistoryI.DEFINITIONSRISK PREMIUMa1.The excess return required from a risky asset over that required from a risk-free asset is called the:a.risk premium.b.geometric premium.c.excess return.d.average return.e.variance.VARIANCEb2.The average squared difference between the actual return and the average return is called the:a.volatility return.b.variance.c.standard deviation.d.risk premium.e.ex
