Which of the Following Statements Is CORRECT

question 88

Multiple Choice

Which of the following statements is CORRECT?

• A) if the risk-free rate rises, then the market risk premium must also rise.
• B) if a company's beta is halved, then its required return will also be halved.
• C) if a company's beta doubles, then its required return will also double.
• D) the slope of the security market line is equal to the market risk premium, (rm - rrf).
• E) beta is measured by the slope of the security market line.

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Definitions:

Comparative Reasoning

Evaluating two or more objects, ideas, or situations to identify similarities and differences.

Comparative Inferences

The process of drawing conclusions based on comparisons between different sets of data or situations.

Productivity Criterion

A measure or standard used to evaluate the efficiency and effectiveness of a task or process.

Comparative Reasoning

A logical process that involves comparing similarities and differences among entities or scenarios to form a conclusion or determination.