Question

Fill in the blank: The line that charts the highest possible expected return for a given level of risk for a group of stocks is called the _ frontier.

Fill in the blank: The line that connects the risk-free asset (e.g., a U.S. Treasury bond) with the market portfolio is called the _market line.

Fill in the blank: Buying stocks with borrowed money is called "buying on_ ".

Fill in the blank: _measures a stock's systematic risk.

Fill in the blank: The regression line plotting a stock's returns against market returns is called that stock's _ line.

Answer 1

The line that charts the highest possible expected return for a given level of risk for a group of stocks is called the EFFECIENT frontier.

The line that connects the risk-free asset (e.g., a U.S. Treasury bond) with the market portfolio is called the CAPITAL market line.

Buying stocks with borrowed money is called "buying on MARGIN ".

Beta measures a stock's systematic risk.

The regression line plotting a stock's returns against market returns is called that stock's CHARACTERSTIC line.