If Markets Are Efficient and in Equilibrium

question 28

Multiple Choice

If markets are efficient and in equilibrium:

• A) all securities would lie on the SML.
• B) any security that plots below the SML would be considered undervalued.
• C) any security that plots above the SML would be considered overvalued.
• D) no security would lie on the SML.

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Definitions:

OOS Flags

OOS Flags, referring to "Out Of Service" flags, are indicators used in various fields, especially in transportation and equipment maintenance, to signal that a vehicle, machine, or system is not operational and should not be used until it is repaired or deemed safe.

Trailers Chassis Systems

The structural framework of trailers, including the axles, wheels, and suspension systems, that supports the load and provides stability.

Tread Depth

The measurement from the top of a tire's tread to the deepest groove, indicating how much tread remains on a tire.

OOS

Out Of Service; indicating that a device, system, or piece of equipment is not currently operational or fit for use.