CFA Practice Question

There are 294 practice questions for this study session.

CFA Practice Question

A security characteristic line is ______

A. the security market line when expressed in terms of the required return and standard deviation of a security or a portfolio.
B. a graph of the required return on a security and its systematic risk.
C. the regression line between the excess return on a security and the excess return on the market portfolio.
Correct Answer: C

A security characteristic line is a regression between the excess return on a security and the excess return on the market. The slope of the line provides an estimate of the beta of a security.

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