The security characteristic line (SCL)
A)plots the excess return on a security as a function of the excess return on the market.
B)allows one to estimate the beta of the security.
C)allows one to estimate the alpha of the security.
D)All of the options
E)None of the options

Question

Quizplus · Accepted Answer

The security characteristic line, which plots the excess return of the security as a function of the excess return of the market, allows one to estimate both the alpha and the beta of the security.

The Security Characteristic Line (SCL)