Utilizing the Security Market Line an Investor Owning a Stock

question 73

Multiple Choice

Utilizing the security market line an investor owning a stock with a beta of -2 would expect the stock's return to ____ in a market that was expected to decline 15%.

• A) Rise or fall an indeterminate amount
• B) Fall by 3%
• C) Fall by 30%
• D) Rise by 13%
• E) Rise by 30%

---

Definitions:

Performance Evaluation

The process of assessing and reviewing an employee's or organization's work performance and outcomes against predefined objectives.

Departmental Sales

This term involves the revenue generated by different departments within a larger retail store or company, tracked separately to gauge performance.

Responsibility Accounting

An accounting system that collects, summarizes, and reports financial information related to the responsibilities of individual managers or departments, encouraging accountability.