The risk-free rate of return subtracted from the expected market rate of return is called the:

A) Expected rate of return.
B) Real rate of expected return.
C) Risk premium.
D) Unexpected rate of return.
E) Unsystematic rate of risk.

Risk-Free Rate

The rate of return on an investment with no risk of financial loss, often represented by the yield on government Treasury bills.

Expected Market Rate

The forecasted rate of return anticipated by investors in the financial markets, based on current conditions and future projections.

Risk Premium

The extra return above the risk-free rate that investors require to hold a risky investment.