Which portfolio(s) plot above the security market line?
Refer: To: 13-72
A) A only
B) B only
C) C only
D) A and C only
E) B and D only

Question

Quizplus · Accepted Answer

Portfolios that plot above the Security Market Line (SML) are considered to have a higher return for a given level of risk than what the market predicts, indicating they are performing better than expected under the Capital Asset Pricing Model (CAPM). Choices A and C are correct because they are described as plotting above the SML.

Which Portfolio(s) Plot Above the Security Market Line