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 will have a return that is in equilibrium with its level of risk, which is represented by the Security Market Line. Therefore, its return will be on the Security Market Line, neither above nor below it.

A Security That Is Fairly Priced Will Have a Return