If the project beta and IRR coordinates plot above the SML the project should be:
A) accepted.
B) rejected.
C) It is impossible to tell.
D) It will depend on the NPV.
E) None of these.

Question

Quizplus · Accepted Answer

If a project's beta and IRR coordinates plot above the SML, it means the project's returns are greater than what should be expected given its level of risk. This indicates that the project's return is attractive and the project should be accepted.

If the Project Beta and IRR Coordinates Plot Above the SML