Author Question: The expected return on the market is 9% and the risk free rate is 4%. A stock has an expected return ... (Read 136 times)

crazycityslicker · **on:** Apr 25, 2021

Question 1

The expected return on the market is 8% and the risk free rate is 3%. A stock has an expected return of 6.75% and a beta of 0.75. Where does the stock plot relative to the SML?
◦ Below the SML
◦ On the SML
◦ Above the SML

Question 2

The expected return on the market is 9% and the risk free rate is 4%. A stock has an expected return of 8% and a beta of 0.8. What is the slope of the SML?
◦ 1.00%
◦ 4.00%
◦ 5.00%
◦ 8.00%
◦ 9.00%

maya.nigrin17@yahoo.com · **Reply #1 on:** Apr 25, 2021

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