A Stock with an Actual Return That Lies Above the Security

A stock with an actual return that lies above the security market line has:

A) more systematic risk than the overall market.
B) more risk than warranted based on the realized rate of return.
C) yielded a higher return than expected for the level of risk assumed.
D) less systematic risk than the overall market.
E) yielded a return equivalent to the level of risk assumed.

Correct Answer:

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