In a highly competitive market, all stocks should:

A) Produce the same rate of return.
B) Plot on the same security market line.
C) Have the same beta.
D) Have the same standard deviation.
E) Plot at the intercept point.

Highly Competitive Market

A market structure characterized by a large number of sellers and buyers, leading to competitive pricing and minimal market power for individual firms.

Security Market Line

A representation in the capital asset pricing model (CAPM) that displays the relationship between the expected return of a security and its systemic risk.

Beta

A statistic that measures the volatility of a stock or portfolio compared to the market as a whole, used in the CAPM to calculate cost of equity.