Both Assets a and B Plot on the SML

question 80

Multiple Choice

Both assets A and B plot on the SML.Asset A has an expected return of 15% and a beta of 1.7.Asset B has an expected return of 12% and a beta of 1.1.What is the slope of the security market line?

• A)5.0%
• B)6.5%
• C)11.5%
• D)cannot be determined from this information.

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Definitions:

Adaptive Response

A reaction to a change in the environment that enables an organism or system to better survive or operate.

Physical Demand Stressor

A factor in the workplace that causes stress due to physical efforts or demands required by a job.

Temperature

A physical quantity expressing how hot or cold an environment is, typically measured in degrees Celsius (°C), Fahrenheit (°F), or Kelvin (K).

Group Pressure

The influence exerted by a group on individual members to change their attitudes, values, or behaviors to conform to group norms.