Which of the Following Is True About the Security Market

question 34

Multiple Choice

Which of the following is true about the security market line (SML) derived from the APT?

• A)The SML has a downward slope.
• B)The SML for the APT shows expected return in relation to portfolio standard deviation.
• C)The SML for the APT has an intercept equal to the expected return on the market portfolio.
• D)The benchmark portfolio for the SML may be any well-diversified portfolio.

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Definitions:

Networking

The process of making connections with mutually beneficial business contacts.

Informal Connections

Relationships or networks that are established through casual or unofficial interactions.

Mutually Beneficial

A situation or agreement that provides advantages or positive outcomes for all parties involved.

Business Contacts

Individuals or organizations within a professional network that can provide support, information, or business opportunities.