The Security Characteristic Line (SCL) Associated with the Single-Index Model

question 60

Multiple Choice

The security characteristic line (SCL) associated with the single-index model is a plot of

• A)the security's returns on the vertical axis and the market index's returns on the horizontal axis.
• B)the market index's returns on the vertical axis and the security's returns on the horizontal axis.
• C)the security's excess returns on the vertical axis and the market index's excess returns on the horizontal axis.
• D)the market index's excess returns on the vertical axis and the security's excess returns on the horizontal axis.

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Definitions:

Current Asset

An asset that is expected to be converted into cash, sold, or consumed within one year or within the operating cycle of the business, whichever is longer.