Which of the Following Statements Are Correct

question 37

Multiple Choice

Which of the following statements are correct?
I.The SML approach is dependent upon a reliable measure of a firm's unsystematic risk.
II.The SML approach can be applied to firms that retain all of their earnings.
III.The SML approach assumes a firm's future risks are similar to its past risks.
IV.The SML approach assumes the reward-to-risk ratio is constant.

• A)I and III only
• B)II and IV only
• C)III and IV only
• D)I, II, and III only
• E)II, III, and IV only

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