Which of the Following Statements Is CORRECT

question 56

Multiple Choice

Which of the following statements is CORRECT?

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

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Definitions:

Cirrhosis

An irreversible condition, often caused by excessive drinking, in which the liver becomes scarred and begins to change in anatomy and functioning.

Confabulation

A made-up description of one’s experience to fill in a gap in one’s memory.

Binge Drink

The consumption of an excessive amount of alcohol in a short period of time, typically leading to acute intoxication.

Heavy Drinkers

Individuals who consume alcohol in large quantities frequently, posing risks to their health.