【正文】 A.s returns divided by the variance of the market39。s returns.C.the covariance between the security39。I, II, and IVI onlyB.The risk measure for the CML is standard deviation.The CML is the line from the riskfree rate through the market portfolio.B.I, II, and IIII onlyB.All of the options are true.It includes all publicly traded financial assets.B...B...B..A.unique risk.D.reinvestment risk.E.A.None of the optionsmarket risk.B.4.According to the Capital Asset Pricing Model (CAPM) a well diversified portfolio39。unique risk.B.variance of returns.A.standard deviation of returns.D.Chapter 09The Capital Asset Pricing ModelA.variance of returns.unique risk.B.3.In the context of the Capital Asset Pricing Model (CAPM) the relevant risk ismarket risk.C.s rate of return is a function ofunsystematic risk.C.5.According to the Capital Asset Pricing Model (CAPM) a well diversified portfolio39。beta risk.B.None of the optionsA.reinvestment risk.0.B.8.The riskfree rate and the expected market rate of return are and , respectively. According to the capital asset pricing model (CAPM), the expected rate of return on security X with a beta of is equal to.C.9.The riskfree rate and the expected market rate of return are and , respectively. According to the capital asset pricing model (CAPM), the expected rate of return on a security with a beta of is equal to.C.10.Which statement is not true regarding the market portfolio?It lies on the efficient frontier.C.11.Which statement is true regarding the market portfolio?I) It includes all publicly traded financial assets.II) It lies on the efficient frontier.III) All securities in the market portfolio are held in proportion to their market values.IV) It is the tangency point between the capital market line and the indifference curve.II onlyC.12.Which statement is not true regarding the capital market line (CML)?The CML is the best attainable capital allocation line.C.13.Which statement is true regarding the capital market line (CML)?I) The CML is the line from the riskfree rate through the market portfolio.II) The CML is the best attainable capital allocation line.III) The CML is also called the security market line.IV) The CML always has a positive slope.II onlyC.14.The market risk, beta, of a security is equal tos return and the market return divided by the variance of the market39。the variance of the security39。s returns.Rf + β [E(RM)].B.16.The security market line (SML) isalso called the capital allocation line.C.17.According to the Capital Asset Pricing Model (CAPM), fairly priced securities havezero alphas.C.negative betas.D.negative alphas.D.A.positive alpha is considered to be underpriced.The expected rate of return on a security increases in direct proportion to a decrease in the riskfree rate.B.All of the statements are true.market risk is negligible.B.23.Empirical results regarding betas estimated from historical data indicate that betasof all securities are always greater than one.C.24.Your personal opinion is that a security has an expected rate of return of . It has a beta of . The riskfree rate is and the market expected rate of return is . According to the Capital Asset Pricing Model, this security isoverpriced.C.sell the stock short because it is underpriced.D..D.%.D.A.Cannot be determined from data provided.underpriced.B.30.Your opinion is that CSCO has an expected rate of return of . It has a beta of . The riskfree rate is and the market expected rate of return is . According to the Capital Asset Pricing Model, this security isoverpriced.C.31.Your opinion is that Boeing has an expected rate of return of . It has a beta of . The riskfree rate is and the market expected rate of return is . According to the Capital Asset Pricing Model, this security isoverpriced.C.fairly priced.D.A.Cannot be determined from data provided.4%.B.1%.%.B.%.4%.B.%.4%.B.%.10%.B.%.buy CAT because it is overpriced.B.None of the options, as CAT is fairly pricedbuy CAT because it is overpriced.B.None of the options, as CAT is fairly pricedbuy CAT because it is overpriced.B.None of the options, as CAT is fairly priced.B..A because it offers an expected excess return of %.D.systematic risk.D.A.inversely with beta.E.A.The riskfree rate.both systematic and unsystematic risk.B.total risk while standard deviation measures only nonsystematic risk.is the most familiar expression of the CAPM to practitioners.B.None of the options is true.can be portrayed graphically as the expected returnbeta relationship.B.can be portrayed graphically as the expected returnstandard deviation of market returns relationship and provides a benchmark for evaluation of investment performance.longterm returns but not shortterm returns.B.None of the options was suggested by Stein.liquid stocks earn higher returns than illiquid stocks.B.52.An underpriced security will plotbelow the security market line.C.53.An overpriced security will plotbelow the security market line.C.54.The risk premium on the market portfolio will be proportional tothe risk of the market portfolio as measured by its variance.C.55.In equilibrium, the marginal price of risk for a risky security