The Variable Measured on the Y-Axis Increases Whenever the Variable

question 255

Multiple Choice

The variable measured on the y-axis increases whenever the variable measured on the x-axis increases. As a result, the relationship between the variables will

• A) have a slope of zero.
• B) be negatively sloped.
• C) be a vertical line.
• D) be none of the above.

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Definitions:

SML

Stands for Security Market Line, which represents the expected return of a market security as a function of its systematic, non-diversifiable risk.

Coefficient of Variation

A statistical measure that assesses the relative variability of data points around the mean, indicating the level of dispersion.

Standard Deviation

A statistical measure of the dispersion or variability of a set of values, often used in finance to quantify the risk associated with an investment's return.

Perfectly Positively Correlated

A relationship between two variables where they move in the same direction at the same time with a correlation coefficient of +1.