Given the Beta and Expected Return of ALL of the Following

question 22

Multiple Choice

Given the beta and expected return of ALL of the following assets, which of the following asset bundles could NOT be found on the security market line? Assume the risk free asset has an expected return of 4%.

$$\begin{array} { l c c } \text { Asset Bundle } & \text { Beta } & \text { Expected Return } \\\text { Market Portfolio } & 1.00 & 12 \% \\\text { Bundle ABC } & 0.50 & 8 \% \\\text { Bundle AEP } & 1.50 & 14 \% \\\text { Bundle KAM } & 0.75 & 10 \%\end{array}$$

• A) The Market Portfolio
• B) Bundle ABC
• C) Bundle AEP
• D) Bundle KAM
• E) All of the above would found on the security market line

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Definitions:

M-Form

The Multidivisional Structure, a form of organizational structure where a corporation is divided into several semi-autonomous divisions, each with its own management.

Customer Demand

The amount of a product or service that buyers are prepared and can afford to buy at a certain price.

Coordination

The method of coordinating individuals or teams to ensure they collaborate effectively and efficiently.

M-Form Organization

A structure for managing a diversified company by operating separate divisions in distinct markets or industries, each with its own management team.