Question
Which of the following statements about Security Market Line (SML) equation ri = rRF + (rM rRF)bi = rRF + (RPM)bi is true? a. ri
Which of the following statements about Security Market Line (SML) equation ri = rRF + (rM rRF)bi = rRF + (RPM)bi is true?
a. ri is the expected rate of return for stock i.
b. rRF is the real risk-free rate.
c. rM is the required rate of return on a portfolio consisting of all stocks, which is called the market portfolio.
d. RPM is the risk premium on the stock.
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Fundamentals Of Corporate Finance
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
5th Edition
1119795435, 978-1119795438
