Utilizing the Security Market Line an Investor Owning a Stock

question 58

Multiple Choice

Utilizing the security market line an investor owning a stock with a beta of -2 would expect the stock's return to ____ in a market that was expected to decline 15 percent.

• A)Rise or fall an indeterminate amount
• B)Fall by 3%
• C)Fall by 30%
• D)Rise by 13%
• E)Rise by 30%

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Definitions:

Expression

The process of conveying thoughts, feelings, or ideas, whether through facial movements, words, artistic forms, or gestures.

Moral Guardian

An individual or entity that upholds and enforces societal, ethical, or moral standards.

Freud

Sigmund Freud, an Austrian neurologist who is the founder of psychoanalysis, a discipline concerned with the interplay of unconscious and conscious mind.

Personality

A unique set of emotional, thought, and behavioral patterns that define an individual.