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:

Declaration of Independence

A foundational document adopted on July 4, 1776, in which the thirteen American colonies declared their independence from British rule.

Revolutionary War

The Revolutionary War, also known as the American Revolution, was the conflict between thirteen American colonies and British rule that led to the formation of the United States of America after the colonies won their independence.

Compromise

An agreement or settlement reached by each party making concessions.

Economic

Pertaining to the production, distribution, and use of income, wealth, and commodities.