Which of the Following Statements Is Incorrect

question 48

Multiple Choice

Which of the following statements is incorrect?

• A)The security market line shows the relationship between risk and return for any stock or portfolio.
• B)The y-intercept of the security market line represents the return on the risk-free asset.
• C)The measure of risk used in creating the security market line is the standard deviation.
• D)None of these statements is incorrect.

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Definitions:

Value in Exchange

The worth that a product or service has in the marketplace, determined by what others are willing to give up in exchange for it.

Marginal Utility

The increased gratification or utility obtained by consuming an additional unit of a good or service.

Total Utility

The total satisfaction received by a consumer from consuming a certain amount of a good or service.

Marginal Utility

The change in satisfaction or utility derived by consuming an additional unit of a good or service.