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 233 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?

The average person is easily confused by the terms pharmaceutics and pharmacology, thinking they are one and the same. Whereas pharmaceutics is the science of preparing and dispensing drugs (otherwise known as the science of pharmacy), pharmacology is the study of medications.

Did you know?

People who have myopia, or nearsightedness, are not able to see objects at a distance but only up close. It occurs when the cornea is either curved too steeply, the eye is too long, or both. This condition is progressive and worsens with time. More than 100 million people in the United States are nearsighted, but only 20% of those are born with the condition. Diet, eye exercise, drug therapy, and corrective lenses can all help manage nearsightedness.

Did you know?

Amphetamine poisoning can cause intravascular coagulation, circulatory collapse, rhabdomyolysis, ischemic colitis, acute psychosis, hyperthermia, respiratory distress syndrome, and pericarditis.

Did you know?

When blood is exposed to air, it clots. Heparin allows the blood to come in direct contact with air without clotting.

Did you know?

According to the CDC, approximately 31.7% of the U.S. population has high low-density lipoprotein (LDL) or "bad cholesterol" levels.

For a complete list of videos, visit our video library