The Y-Axis Intercept of the SML Represents the Required Return

question 60

True/False

The Y-axis intercept of the SML represents the required return of a portfolio with a beta of zero, which is the risk-free rate.

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Definitions:

Maslow's Need Hierarchy

A psychological theory proposing that humans are motivated by five basic categories of needs: physiological, safety, love/belonging, esteem, and self-actualization, in ascending order of importance.

Safety

The condition of being protected from or unlikely to cause danger, risk, or injury.

Physiological

Pertaining to the branch of biology that deals with the normal functions of living organisms and their parts.

Self-Actualization

The realization or fulfillment of one's talents and potentialities, considered as a drive or need present in everyone.