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Jennthejelly Jennthejelly
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4 months ago
Which of the following is a FALSE statement about the security market line (SML)?

▸ It implies that securities with betas less than the market beta of 1.0 are less risky than the "average" stock and will therefore have lower required rates of return.

▸ It indicates that the size of the risk premium varies directly with a security's market risk, as measured by beta.

▸ It represents the trade off between total risk and the required rate of return for any risky security.

▸ It is upward sloping, which indicates that investors require a higher expected return on riskier securities.
Textbook 
Corporate Finance

Corporate Finance


Edition: 5th
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davisdiamonddavisdiamond
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4 months ago
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Jennthejelly Author
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4 months ago
Smart ... Thanks!
shelbycox
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Yesterday
I appreciate what you did here, answered it right Smiling Face with Open Mouth
hmonier
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2 hours ago
Correct Slight Smile TY
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