A security that is fairly priced will have a return that lies _____ the Security Market Line.
A) Below.
B) On or below.
C) On.
D) On or above.
E) Above.

Question

Quizplus · Accepted Answer

A security that is fairly priced according to the Capital Asset Pricing Model (CAPM) will have an expected return that lies on the Security Market Line (SML). The SML represents the expected return of a security based on its systematic risk (beta).

A Security That Is Fairly Priced Will Have a Return