Which of the Following Statements Is CORRECT

question 94

Multiple Choice

Which of the following statements is CORRECT?

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

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Definitions:

Implied Title

A legal concept indicating that ownership is suggested or inferred through actions or circumstances rather than explicitly conveyed via a formal document.

Passing of Title

The act of transferring the ownership of property from one person or entity to another.

Real Property

Land and everything permanently attached to it.

Lease Contracts

Agreements in which one party grants another the use of property, equipment, or premises for a specified period in exchange for rental payments.