Multiple Choice
Which of the following statements is CORRECT?
A) If the risk-free rate rises, then the market risk premium must also rise.
B) If a company's beta is halved, then its required return will also be halved.
C) If a company's beta doubles, then its required return will also double.
D) The slope of the security market line is equal to the market risk premium, (rM − rRF) .
E) Beta is measured by the slope of the security market line.
Correct Answer:
Verified
Correct Answer:
Verified
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