The Security Market Line (SML) is

Related MCQs

• At the prevailing environment, the Capital Market Line (CML) equation for a portfolio is given as E(ri),% = 8 + 0.36 ?i The ex-ante SML equation for the same portfolio i is E(ri),% = 8 + 5.50 ?i Therefore, the variance of market portfolio is approximately
• Which of the following statements is false about the Security Market Lines (SML)?
• Which of the following statements is/are true with respect Capital Market Line (CML)? I. It is the line passing from risk-free rate through market portfolio. II. The slope of CML is called market price of risk. III. CML fails to express equilibrium pricing relationship between expected return and standard deviation for all efficient portfolios lying along the line.
• Which of the following statement(s) is/are true? I. A unique characteristic line is plotted for each security to determine the beta. II. For a characteristic line, the X-axis represents betas for different securities. III. The slope of the characteristic line is the difference between the market returns andrisk-free returns.
• According to security market line, the expected return of any security is a function of:
• The SML depicts the tradeoff between risk and required return for:
• Which of the following is on the horizontal axis of the Security Market Line?
• If an asset’s expected return plots above the security market line, the asset is:
• Fundamental analysis focuses on predicting the future price of a security and Technical analysis on estimating the intrinsic value of a security.
• When ranking the riskiness of securities using the standard deviation, the highest risk security to the lowest risk security is as follows: