Select the Incorrect Statement Regarding the CML

question 41

Multiple Choice

Select the incorrect statement regarding the CML.

• A)The CML is an equilibrium relationship for efficient portfolios and individual securities.
• B)The CML represents the risk-return tradeoff for efficient portfolios.
• C)The intercept of the CML is the reward to investors for deferring consumption.
• D)The CML relies on standard deviation as the measure of risk.

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Definitions:

Accounts Receivable

Debt owed by customers to an enterprise for goods or services supplied but not yet settled.

Interim Statements

Financial reports covering a period of less than a full fiscal year, often quarterly, to provide timely insights into a company’s performance.

Accounting Period

A specific period of time used for financial reporting and analysis, typically a year or quarter.

Fiscal Year Periodic Statements

Financial statements prepared at regular intervals, typically annually, based on the company's fiscal year rather than a calendar year.