A Particular Asset Has a Beta of 1

question 24

Multiple Choice

A particular asset has a beta of 1.2 and an expected return of 10%.The expected return on the market portfolio is 13% and the risk-free is 5%.Which of the following statement is correct?

• A) This asset lies on the security market line.
• B) This asset lies above the security market line.
• C) This asset lies below the security market line.
• D) Cannot tell from the given information.

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Definitions:

Synergy

The increased effectiveness or achievement that results when individuals or groups work together compared to when they work separately.

Stereotyping

The act of ascribing a fixed, oversimplified, and often exaggerated or prejudiced image or idea to a person or group.

Win-Win

A situation or outcome where all parties involved gain or achieve benefit.

Gender Egalitarianism

The belief in the equality of all genders, advocating for equal rights, responsibilities, and opportunities.