Use the Figure for the Question(s)below

question 47

Multiple Choice

Use the figure for the question(s) below.Consider the following graph of the security market line:
-Portfolio "D":

• A)falls below the SML.
• B)has a negative alpha.
• C)is overpriced.
• D)offers an expected return equal to the risk-free rate.

---

Definitions:

Complementary Input

Goods or services that enhance the value or efficiency of another product or service when used together.

Demand Curve

A graph that shows the relationship between the price of a product and the quantity of the product demanded.

Substitution Effect

The substitution effect occurs when consumers replace more expensive items with less expensive alternatives as prices change, thereby altering their consumption patterns.

Baby Boomers

The demographic cohort following World War II, typically defined as individuals born from 1946 to 1964, characterized by a significant increase in birth rates.