Which of the Following Statements Is CORRECT

question 131

Multiple Choice

Which of the following statements is CORRECT?

• A) Beta is measured by the slope of the security market line.
• B) If the risk-free rate rises, then the market risk premium must also rise.
• C) If a company's beta is halved, then its required return will also be halved.
• D) If a company's beta doubles, then its required return will also double.
• E) The slope of the security market line is equal to the market risk premium, (rM − rRF).

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