8. Regarding the risk-and-return discussion, find the incorrect statement below.

A) The nondiversifiable risk of an asset is measured by its beta coefficient (b).

B) An assets risk premium divided by its b is called the reward-to-risk ratio.

C) Market risk premium is the difference between the expected return on the

market portfolio and the risk-free rate.

D) The Security Market Line (SML) shows the linear relation between an asset's

expected return and its variance.