Author Question: If we examine the security market line, we see that the market risk premium is the risk-free rate ... (Read 284 times)

neverstopbelieb · **on:** Jul 10, 2018

If we examine the security market line, we see that the market risk premium is the risk-free rate minus the expected return on the market portfolio.

Indicate whether the statement is true or false.

Question 2

A decline in the Housing Affordability Index indicates that housing

A)

prices and family income have declined.
B)

prices and family income have increased.
C)

prices have declined and family income has increased.
D)

is now more difficult for the typical family to purchase and finance.

Dnite · **Reply #1 on:** Jul 10, 2018

Answer to Question 1

Answer: FALSE
Explanation: The market risk premium is the expected return on the market portfolio minus the risk-free rate.

Answer to Question 2

D