Which of the Following Statements Is CORRECT

question 120

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.

---

Definitions:

Qualitative Model

A model that focuses on non-quantifiable aspects such as patterns, themes, or descriptions to understand phenomena or behaviors.

Long-Term Environmental Forecasts

Predictions about how the broader environment, including social, technological, economic, environmental, and political trends, will change over a lengthy period and affect an organization.

Delphi Technique

A method of group communication and forecasting in which participants complete questionnaires in multiple rounds to reach a consensus.

Nominal Group Technique

A structured method for group brainstorming that encourages contributions from everyone in the group and is used to generate a broad array of ideas or solutions.