1. Which of the following statements is correct?
1. the slope of the security market line is equal to the market risk premium.
2. lower beta stocks have higher required returns.
3. a stocks beta indicates. its company's-specific risk.
4. company-specific risk cannot be diversified away.
5. two securities with the same stand-alone risk will have the same betas.
2. The principle that investors slowly adjust their beliefs to new information is referred to as
A. conservatism.
B. stockholder disinterest.
C. reversal.
D. insider trading.
E. continuation.