Which of the Following Statements Is CORRECT

question 111

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, (r_M − r_RF).
• E) Beta is measured by the slope of the security market line.

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Definitions:

Philadelphia

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Efforts and actions taken by American colonists to oppose British rule, leading up to the American Revolution.

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An act of voluntary and intentional abstention from using, buying, or dealing with a person, organization, or country as an expression of protest, usually for social or political reasons.