Which of These Represents the Line Drawn Between the Point

question 31

Multiple Choice

Which of these represents the line drawn between the point of tangency of the efficient frontier and the risk free rate?

• A)The capital market line
• B)The equity return line
• C)The equity market line
• D)The security market line

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Definitions:

Fixed Costs

Expenses that do not change with the level of goods or services produced by a business, such as rent, salaries, and insurance.

Contribution Per Unit

The amount of revenue from each unit sold that contributes to covering fixed costs and generating profit.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, or insurance premiums.

Variable Cost

Costs that vary directly with the level of production or sales volume, such as materials and labor.