The Historical Returns Data for the Past Three Years for Company

question 50

Multiple Choice

The historical returns data for the past three years for Company A's stock is -6.0%, 15%,
15% and that of the market portfolio is 10%, 10% and 16%. According to the security market line (SML) , the Stock A is:

• A) Over priced
• B) Under priced
• C) Correctly priced
• D) Need more information

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Definitions:

Stress

A state of mental or emotional strain or tension resulting from adverse or demanding circumstances.

Negative Effects

The adverse outcomes or undesirable impacts resulting from a policy, action, or decision.

Computer Use

The application of computers to store, retrieve, transmit, and manipulate data or information.

Line Of Sight

The clear understanding employees have regarding how their individual efforts contribute to the achievement of organizational goals.