Investment projects that plot above the security market line would be considered to have:
A) a positive NPV.
B) a negative NPV.
C) a zero NPV.
D)an excessively high discount rate.

Question

Quizplus · Accepted Answer

Investment projects that plot above the security market line have a higher expected return than the market for the level of risk taken. Therefore, they would be considered as having a positive net present value (NPV).

Investment Projects That Plot Above the Security Market Line Would