CHAPTER 21 QUIZ 26 TO 30
26. By picking stocks that are perfectly correlated, unsystematic risk may be eliminated.
27. The Security Market Line shows the risk-return trade-off for an individual security.
28. The investor is only assumed to received additional returns for unsystematic risk.
29. An assumption of the capital asset pricing model is that investors can borrow or lend an unlimited amount of funds at a given risk-free
rate.
30. There is debate in regard to the capital asset pricing model about the appropriate Rf, Km, and stability of beta.