If an Asset Has a Risk-Return Combination That Is Below

question 50

Multiple Choice

If an asset has a risk-return combination that is below the Security Market Line (SML) , then this indicates that the asset's

• A) expected rate of return is lower than could be had from some combination of the risk-free asset and the market portfolio.
• B) expected rate of return is higher than could be had from some combination of the risk-free asset and the market portfolio.
• C) price will rise as arbitrage proceeds in the market.
• D) risk will rise as arbitrage proceeds in the market.

Understand the importance of adopting existing technology for the development of developing countries.

Recognize the role of human capital investment in the development process of newly industrialized economies.

Comprehend the economic and social indicators reflecting stages of development among countries.

Identify strategies for developing countries to close the developmental gap with developed countries.

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Definitions:

Essential Features

Characteristics that are necessary and defining for a concept, condition, or object.

Signs

Objective indicators of a medical condition that can be observed or measured by someone other than the patient.

Symptoms

The signs or manifestations of a disease or condition experienced by an individual.

Diagnostic Error

Mistakes made in the process of diagnosing a condition, which can result from misinterpretation of symptoms, tests, or failure to follow appropriate diagnostic guidelines.