Which of the Following Is a True Statement

Multiple Choice

Which of the following is a true statement?

A) To calculate the expected risk premium one needs the expected return on the risky asset and the return on a risk-free asset.
B) The risk premium is the difference between the return on a risky asset and the return on the market portfolio.
C) The expected return on an asset is equal to the sum of the possible returns divided by their probabilities.
D) Comparison of two different risky assets cannot be simplified by calculating the expected return for each.
E) Expected returns depend on the states of the economy but not the associated probabilities.