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 risk-free rate of return?

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

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Definitions:

Medulla

A part of the brainstem vital for autonomic functions like breathing, heart rate, and blood pressure regulation.

Fearlessness

The absence of fear or the ability to confront fear or danger without being overtaken by it.

Amygdala

The amygdala is a section of the brain that is responsible for detecting fear and preparing for emergency events. It plays a key role in the processing of emotions.

Cerebellum

A region of the brain at the back of the skull in vertebrates, responsible for coordinated movement and balance.