If the _____ of any individual stock is known, an investor can use the _____ to determine the expected rate of return on that stock.
A)Beta; capital market line
B)Beta; security market line
C)Standard deviation; capital market line
D)None of the above

Question

Quizplus · Accepted Answer

Beta measures the level of systematic risk of an individual stock in relation to the overall market. With the help of the security market line, an investor can determine the expected rate of return of a stock based on its risk level or beta. Therefore, option B is the correct choice.

If the _____ of Any Individual Stock Is Known, an Investor