The vertical intercept of the Security Market Line is determined by the
A) beta of the market portfolio.
B) discount rate.
C) risk-free interest rate.
D) risk premium.

Name: The vertical intercept of the Security Market Line is determined by the A) beta of the market portfolio. B) discount rate. C) risk-free interest rate. D) risk premium.
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Question

Quizplus · Accepted Answer

The vertical intercept of the Security Market Line represents the expected return on a risk-free asset, therefore it is determined by the risk-free interest rate.

The Vertical Intercept of the Security Market Line Is Determined