Answered: The security market line has a slope…

The security market line has a slope equal to the a) Risk-free rate b) Market risk premium c) Beta coefficient d) Market rate of return

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 11MC

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Question

The security market line has a slope equal to the

a) Risk-free rate

b) Market risk premium

c) Beta coefficient

d) Market rate of return

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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