Question Details

Selleck & Company





 .	The slope of the SML is determined by the value of beta.

a.	True
b.	False

 .	If you plotted the returns of Selleck & Company against those of the market and found that the slope of your line was negative, the CAPM would indicate that the required rate of return on Selleck- stock should be less than the risk-free rate for a well-diversified investor, assuming that the observed relationship is expected to continue in the future.

a.	True
b.	False

 .	If the returns of two firms are negatively correlated, then one of them must have a negative beta.

a.	True
b.	False

	
 .	A stock with a beta equal to -1.0 has zero systematic (or market) risk.

a.	True
b.	False

	
 .	It is possible for a firm to have a positive beta, even if the correlation between its returns and those of another firm are negative.

a.	True
b.	False





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