The Best Fit Line of a Pairwise Plot of the Returns

question 47

Multiple Choice

The best fit line of a pairwise plot of the returns of the security against the market index returns is called the:

• A) Security Market Line.
• B) Capital Market Line.
• C) characteristic line.
• D) risk line.
• E) None of these.

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Definitions:

Volatility

Volatility refers to the degree of variation of a trading price series over time, typically measured by the standard deviation of returns.

Section Modulus

A geometric property of a cross section, relevant in the design and analysis of beams, that reflects its capacity to resist bending.

Tensile Strength

The highest stress that a material can withstand without separating; expressed in psi. In steels, tensile strength typically exceeds yield strength by about 10 percent.

Weld Profile

The shape, dimensions, and surface contour of a weld bead, which affects the quality and strength of the welded joint.