The Vertical Intercept of the Security Market Line Is Determined

question 143

Multiple Choice

The vertical intercept of the Security Market Line is determined by the

• A) beta of the market portfolio.
• B) discount rate.
• C) risk-free interest rate.
• D) risk premium.

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Definitions:

Outward Shift

In economics, refers to the movement of a curve away from the origin in a graph, indicating an increase in quantity supplied or demanded due to various factors.

Production Possibility Frontier

A plot that displays the extreme production possibilities for two goods, based on an array of resources and additional factors.

Resources Efficiency

The optimal use of resources to achieve the desired outcome with minimal waste, maximizing the effectiveness of resource utilization.

Technology Improvement

Enhancements or upgrades in technology that increase efficiency, productivity, or quality of outputs.