The Y-Axis Intercept of the SML Represents the Required Return

question 22

True/False

The Y-axis intercept of the SML represents the required return of a portfolio with a beta of zero, or the risk-free rate.

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Definitions:

Equitable

Characterized by fairness, justice, and impartiality in the treatment or recognition of all individuals.

World

Refers to the earth, along with all of its countries, peoples, and natural features.

Metabolism

The complex set of life-sustaining chemical transformations within the cells of living organisms.

Linear

Characterized by a sequential, straight progression from one point to another without deviating.