Select the INCORRECT Statement Regarding the CML

question 43

Multiple Choice

Select the INCORRECT statement regarding the CML.

• A)The CML is an equilibrium relationship for efficient portfolios and individual securities.
• B)The CML represents the risk-return tradeoff in equilibrium for efficient portfolios.
• C)The intercept of the CML is the reward per unit of time available to investors for deferring consumption.
• D)Standard deviation is the measure of risk which determines a portfolio's equilibrium return.

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Definitions:

Phytochrome

A photoreceptor in plants that absorbs light primarily in the red and far-red regions, thereby regulating various aspects of growth and development.

Cryptochrome

A class of flavoproteins that are sensitive to blue light and have roles in the circadian rhythms of plants and animals.

Circadian Rhythm

A natural, internal process that regulates the sleep-wake cycle and repeats on each rotation of the Earth roughly every 24 hours.

Thigmomorphogenesis

The growth and developmental changes in plants that result from mechanical stimulation or touch.