Both assets A and B plot on the SML. Asset A has an expected return of 15% and a beta of 1.7. Asset B has an expected return of 12% and a beta of 1.1. What is the slope of the security market line?
A) 5.0%
B) 6.5%
C) 11.5%
D) cannot be determined from this information.
Answer: A
Explanation: A) slope = = = = 5%.
Business
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