The slopes of some key graph-lines covered in the b2 unit

Reference no: EM13781072

">Consider the following statement about the slopes of some key graph-lines covered in the B2 unit.

I. The slope of an estimated Security Market Line (SML) equals the Equity Premium estimated

by the person building the SML graph.

II. The slope of the Security Characteristic Line provides the sensitivity of a stock's price to market-wide news events, relative to, how the Market Portfolio responds to those same events.

Which of the following choices is True regarding the two statements above?

a. Both Statements are true.

b. Only Statement I is true.

c. Only Statement II is true.

d. Neither Statement is true.

Reference no: EM13781072

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