Because the security market line is based only on


1. Because the security market line is based only on non-diversifiable risk…

A. … individual stocks will plot above the SML.

B. … individual stocks will plot on the SML.

C. … individual stocks will plot below the SML.

D. … individual stocks could plot above or below the SML.

E. … none of the above.

2. Seitz Glassware is trying to determine its growth rate for an annual cash dividend. The most recent? dividend, Div0 was $ 0.25per share. The? stock's target return rate is 10%.

What is the? stock's price if

a. the annual growth rate is 1%?

b. the annual growth rate is 3%?

c. the annual growth rate is 5%?

d. the annual growth rate is 7%?

e. the annual growth rate is 9%?

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Financial Management: Because the security market line is based only on
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