According to the CAPM, all investments plot along the security market line.

Question

Quizplus · Accepted Answer

The Capital Asset Pricing Model (CAPM) suggests that all investments plot along the security market line (SML), which represents the expected return of an asset for its level of systematic risk. Assets that fall above the SML are considered to be underpriced, while assets that fall below the SML are considered to be overpriced. Therefore, the correct answer is A.

According to the CAPM, All Investments Plot Along the Security