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 these.
E) none of these.

Question

Quizplus · Accepted Answer

The Security Characteristic Line (SCL) plots the excess return on a security as a function of the excess return on the market, making it possible to estimate the beta of the security. It also allows one to estimate the alpha of the security, making D the correct answer.