【正文】 returns but not shortterm returns.B.can be portrayed graphically as the expected returnstandard deviation of market returns relationship and provides a benchmark for evaluation of investment performance.provides a benchmark for evaluation of investment performance.D.can be portrayed graphically as the expected returnbeta relationship.B.None of the options is true.assumes that investors hold welldiversified portfolios.D.is the most familiar expression of the CAPM to practitioners.B.total risk while standard deviation measures only nonsystematic risk.only unsystematic risk while standard deviation is a measure of total risk.D.both systematic and unsystematic risk.B.The riskfree rate.Zero rate of return.C.A.46.What is the expected return of a zerobeta security?inversely with beta.E.inversely with alpha.C.A.45.According to the CAPM, the risk premium an investor expects to receive on any stock or portfolio increasessystematic risk.D.economic factors.B.B because it has a higher beta.A because it offers an expected excess return of %.D.A because it offers an expected excess return of %.B...D..B.None of the options, as CAT is fairly pricedsell short CAT because it is underpriced.D.buy CAT because it is overpriced.B.None of the options, as CAT is fairly pricedsell short CAT because it is underpriced.D.buy CAT because it is overpriced.B.None of the options, as CAT is fairly pricedsell short CAT because it is underpriced.D.buy CAT because it is overpriced.B.%.%.D.10%.B.%.15%.D.4%.B.%.15%.D.4%.B.%.15%.D.%.B.1%.15%.D.4%.B.Cannot be determined from data provided.overpriced.C.A.33.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 isfairly priced.D.underpriced.B.Cannot be determined from data provided.overpriced.C.A.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 isCannot be determined from data provided.E.overpriced.C.A.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 isfairly priced.D.underpriced.B.Cannot be determined from data provided.overpriced.C.A.28.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 is%.D.%.B...D..B.None of the options, as the stock is fairly pricedsell the stock short because it is underpriced.D.buy the stock because it is overpriced.B.Cannot be determined from data provided.overpriced.C.A.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 isappear to regress toward one over time.E.of all securities are always greater than one.C.A.23.Empirical results regarding betas estimated from historical data indicate that betasunsystematic risk is negligible.D.market risk is negligible.B.All of the statements are true.A fairly priced security has an alpha of zero.D.The expected rate of return on a security increases in direct proportion to a decrease in the riskfree rate.B.positive alpha is considered to be underpriced.zero alpha is considered to be a good buy.C.A.20.According to the Capital Asset Pricing Model (CAPM), a security with anegative alphas.D.positive betas.B.None of the optionsnegative betas.D.positive betas.B.positive alphas.zero alphas.C.A.17.According to the Capital Asset Pricing Model (CAPM), fairly priced securities havethe line that represents the expected returnbeta relationship.E.also called the capital allocation line.C.A.16.The security market line (SML) isβ [E(RM) Rf].D.Rf + β [E(RM)].B.s returns.the variance of the security39。the variance of the security39。the covariance between the security and market returns divided by the standard deviation of the market39。s return and the market return divided by the variance of the market39。A.14.The market risk, beta, of a security is equal toIV onlyE.II onlyC.A.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.The CML always has a positive slope.E.The CML is the best attainable capital allocation line.C.A.12.Which statement is not true regarding the capital market line (CML)?IV onlyE.II onlyC.A.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 p