The Y-Axis Intercept of the SML Indicates the Return on the Individual

question 27

True/False

The Y-axis intercept of the SML indicates the return on the individual asset when the realised return on an average share (beta = 1.0) is zero.

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Definitions:

Unit Elastic

Describes a situation where a percentage change in price leads to an equal percentage change in quantity demanded or supplied.

Quantity Demanded

The aggregate quantity of a product or service that buyers are ready and capable of buying at a specified price point over a certain timeframe.

Price

The amount of money or the value that is considered to be the equivalent of a good or service.

Elasticity of Demand

A measure of how sensitive the quantity demanded of a good is to a change in its price, indicating how consumers' purchasing decisions are affected by price changes.