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:

Ambiguous Stimuli

Refers to sensory information that can be interpreted in multiple ways, leading to uncertainty or variability in perception.

Inner Thoughts

Personal, private reflections or considerations, often not voiced or shared with others.

Personality Inventory

A type of questionnaire or psychological test designed to reveal aspects of an individual's character or psychological makeup.

Individual's Thoughts

The personal cognitive processes or considerations of a person.