Use the Figure for the Question(s)below

question 62

Multiple Choice

Use the figure for the question(s) below.Consider the following graph of the security market line:
-Which of the following statements regarding portfolio "A" is/are correct? 1.Portfolio "A" has a positive alpha.
2.Portfolio "A" is overpriced.
3.Portfolio "A" is less risky than the market portfolio.
4.Portfolio "A" should not exist if the market portfolio is efficient.

• A)1 and 2
• B)1,3,and 4
• C)1 and 3
• D)1,2,3,and 4

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