This topic contains a solution. Click here to go to the answer

Author Question: If the equation E(ri) = rf + (rf + E(rm) - rf i) is the linear equation for the Security Market ... (Read 105 times)

Mollykgkg

  • Hero Member
  • *****
  • Posts: 529
If the equation E(ri) = rf + (rf + E(rm) - rf  i) is the linear equation for the Security Market Line, what portion represents the market risk premium for a stock that does not have a beta of 1.0?
 
  A) i
  B) E(rm) - rf
  C) rf
  D) i  E(rm) - rf

Question 2

The ________ is the intercept on the Security Market Line.
 
  A) prime rate
  B) risk-free rate
  C) market rate of return
  D) beta



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Expo

  • Sr. Member
  • ****
  • Posts: 351
Answer to Question 1

Answer: B

Answer to Question 2

Answer: B





 

Did you know?

Adults are resistant to the bacterium that causes Botulism. These bacteria thrive in honey – therefore, honey should never be given to infants since their immune systems are not yet resistant.

Did you know?

The highest suicide rate in the United States is among people ages 65 years and older. Almost 15% of people in this age group commit suicide every year.

Did you know?

Everyone has one nostril that is larger than the other.

Did you know?

The longest a person has survived after a heart transplant is 24 years.

Did you know?

In Eastern Europe and Russia, interferon is administered intranasally in varied doses for the common cold and influenza. It is claimed that this treatment can lower the risk of infection by as much as 60–70%.

For a complete list of videos, visit our video library