A Security Market Line

question 42

Multiple Choice

A security market line:

• A)explains the co-variance between the returns on the risky asset and the market portfolio.
• B)explains the co-variance between the returns on the risky asset and a riskless asset.
• C)is a graphical representation of the CAPM.
• D)is a graphical representation of the CML.

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Definitions:

Future Generations

The forthcoming individuals or groups of a species that will exist in the future.

Fitness

Degree of adaptation to an environment, as measured by the individual’s relative genetic contribution to future generations.

Armored Glyptodonts

Prehistoric mammals resembling large armadillos with bony plates covering their bodies, now extinct.

Extinct

Refers to a species that no longer exists on Earth, having no living representatives remaining.