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:

Wholesalers

Companies that sell merchandise to other businesses rather than to the public.

Credit Terms

Terms for payment on account by the buyer to the seller.

Sales Discount

A reduction in the price of goods or services offered to customers, often to prompt early payment or bulk purchases.

Perpetual Inventory System

A system for managing inventory accounts that automatically updates the sale or purchase records using computerized point-of-sale technology and software for enterprise asset management.