1. The beta coefficient is a measure of _____.
the relationship between the return of an individual stock and the return on the market
the relationship between the return on a stock and the return on the portfolio
the relationship between the portfolio risk and the market risk
None of the above
2. Which of the following is NOT a problem associated with proving the validity of the security market line?
The appropriate risk-free and market rates
The additional return required for each additional increment of risk in the marketplace
The stability of beta on an individual security over time
All of the above