According to the security market line, there is no reward for waiting. In other words, in order to have any expected return at all, an investor must invest in risky assets
Indicate whether the statement is true or false.
Answer: FALSE
Explanation: According to the security market line, there is a reward for waiting. The risk-free asset can provide you with a positive return without uncertainty of return.
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The incontestability clause typically indicates that the insurance company will not challenge the validity of statements made in the insurance contract
A) after a specified period of time, if the incorrect statements were either honest mistakes or unintentional omissions. B) after a specified period of time, regardless of why the misstatements or omissions were made. C) after the contract is accepted by the company, if the incorrect statements were either honest mistakes or unintentional omissions. D) after the contract is accepted by the company, regardless of why the misstatements or omissions were made.
Regarding the true hedging cost, if the bid-ask spread widens for more distant future contracts, the cost of forward hedging
A) decreases with the maturity of the contract. B) remains constant with the maturity of the contract. C) increases with the maturity of the contract. D) has no direct relationship to the longer term.