contestada

Which of the following is/are TRUE?
I. The beta of the market portfolio is 0.
II. The systematic (market) risk is diversifiable, and the unsystematic risk is non-diversifiable.
III. Assume that capital asset pricing model holds. Then, a security whose expected return falls above the SML (security market line) indicates that the security is undervalued, whereas a security whose expected return falls below the SML indicates that the security is overvalued.

Q&A Education