The Linear Relation Between an Asset's Expected Return and Its

question 112

Multiple Choice

The linear relation between an asset's expected return and its beta coefficient is the:

• A) reward-to-risk ratio.
• B) portfolio weight.
• C) portfolio risk.
• D) security market line.
• E) market risk premium.

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Definitions:

Confidence Interval

A range of values that is used to estimate the true value of a population parameter with a certain level of confidence.

Standard Deviation

An index used to assess the extent of variation or scatter among data points.

Sample Size

The number of observations or individuals in a subset collected from a population for the purposes of statistical analysis.

Confidence

The degree of certainty or trust in a particular outcome or result, often expressed in terms of probability.