Refer to the Graph

question 23

Multiple Choice

Refer to the graph. The intercept of the three Security Market Lines is determined by

• A) the risk-free interest rate.
• B) the interest rate on financial assets with a beta of 1.
• C) the rate on long-term U.S. government bonds.
• D) all of these.

---

Definitions:

Regulatory Commissions

Independent agencies of the federal or state government tasked with the regulation of specific economic activities or behaviors, often focusing on industries like telecommunications, utilities, and securities.

Regulation

A set of rules or laws designed to control or govern conduct, typically implemented by a governmental body.

Social Regulation

The imposition of rules by government aimed at influencing the operation of businesses and individuals in areas such as health, safety, and environmental protection.