Which of the Following Is False About the Security

question 67

Multiple Choice

Which of the following is false about the security market line (SML) derived from the APT?

• A) The SML has a downward slope.
• B) The SML for the APT shows expected return in relation to portfolio standard deviation.
• C) The SML for the APT has an intercept equal to the expected return on the market portfolio.
• D) The benchmark portfolio for the SML may be any well-diversified portfolio.
• E) The SML has a downward slope, shows expected return in relation to portfolio standard . deviation, and has an intercept equal to the expected return on the market portfolio.

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Definitions:

Common Causes

Underlying factors or conditions that consistently contribute to a problem, issue, or variability in a process.

Process Capability Analysis

A statistical method used to assess the ability of a process to produce outputs within predetermined specifications.

Statistical Process Control

A method of monitoring and controlling a process through the use of statistical tools to analyze variability and maintain optimal performance.

Quality Control Attributes

Features or characteristics of a product or service measured or assessed to ensure they meet specific quality standards.