The security market line (SML) shows that the relationship between a security's expected return and its beta is Blank______. Multiple choice question. negative overrated positive insignificant
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The security market line (SML) shows that the relationship between a security's expected return and its beta is Blank______.
negative
overrated
positive
insignificant
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- The lower the standard deviation of returns on a security, the _____ the expected rate of return and the _____ the risk. Multiple Choice lower; lower lower; higher higher; lower higher; higherA change in the risk premium, E(Rm) - Rf, results in... Group of answer choices 1. A change in the vertical intercept of the Security Market Line (SML) 2. No change in the return/beta relationship. 3. A change in the horizontal intercept of the Security Market Line (SML) 4. A change in the slope of the Security Market Line (SML)What is security Market Line (SML)? How it explains risk-return relationship? Explain different scenarios where the changes in SML occurs?
- A security with only diversifiable risk has an expected return that exceeds the riskfree rate of return. Begin your answer with Consistent or Inconsistent followed by your explanation.Please explain why this statement is (False). If a security's realized return is negative, it must have been true that the expected return was greater than the required return.Why is the default F risk in a CMBS offering given more attention?
- A change in the risk premium, E(Rm) - Rf, results in... a) A change in the vertical intercept of the Security Market Line (SML) b) No change in the return/beta relationship. c)A change in the horizontal intercept of the Security Market Line (SML) d)A change in the slope of the Security Market Line (SML)A risky security has less risk than the overall market. What must the beta of this security be? O 0 but< 1 O 1 O The beta cannot be determined based on the information provided.The market efficiency hypothesis claims that, as a rule, the market value and intrinsic value of a security are equal. True False.
- Solve both questions with explanationIf the weakest form of market efficiency holds, then security prices reflect all information found in past prices and volume. Thus, traditional "technical analysis" will not work. Group of answer choices True False5. Under what circumstances will the coefficient of variation of a security's returns and the standard deviation of that security's returns give the same relative measure of risk when compared with the risk of another security?
