bus 401 finance

 Investors will make an investment if:

 

the historical rate of return exceeds the expected rate of return.
the required rate of return exceeds the expected rate of return.
the expected rate of return exceeds the actual rate of return.
the expected rate of return exceeds the required rate of return.

 In the Capital Asset Pricing Model, the market risk premium is best approximated by:

 

the most recent one-year return on the S&P 500 Index (or another market index).
the long-term historic return on a stock market index such as the S&P 500 (or another market index). 
the long-term average spread of the S&P 500 (or another market index) over the yield of long-term government bonds.
the return of the S&P 500 (or another market index) over the current yield of long-term government bonds.

 

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