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What is the slope of the Characteristic Line? A. None of the answers listed here. OB. Bi OC. (Rm -rf)/om OD. (Rm-rf) QUESTION 5

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What is the slope of the Characteristic Line? A. None of the answers listed here. OB. Bi OC. (Rm -rf)/om OD. (Rm-rf) QUESTION 5 Security A has a beta of 1.0, Security B has a beta of 2.0. According to the CAPM, Security B will have... A return that is twice as large as Security A's return. A risk premium on the market that is twice as large as the risk premium on the market for Security A. O None of the answers here. OA risk premium that is twice as large as Security A's risk premium. QUESTION 6 Given the following: rf = 4%, E(Rm) = 12% and i = 1.5. According to the CAPM, what is the expected return on security i? O none of the answers listed here. 16% 12% 18%

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