21. Security I has a beta of 1.3, the risk-free rate is 4%, and the expected return on the market is 11%. What is the expected return for Security I?

A. 15.0%

B. 18.3%

C. 14.6%

D. 13.1%

22. The slope of the security market line is:

A. the return on the market.

B. beta.

C. the market risk premium.

D. the risk-free rate.

23. According to the CAPM (capital asset pricing model), the security market line is a straight line. The intercept of this line should be equal to

A. zero

B. the expected risk premium on the market portfolio

C. the risk-free rate

D. the expected return on the market portfolio

25. Studies suggest that if you expect the market to fall 10%, to make the most money, you should

A. short-sell low beta stocks.

B. short-sell high beta stocks.

C. buy low beta stocks

D. buy high beta stocks.