Other things held constant, if the expected inflation rate DECREASES, and investors also become MORE risk averse, the Security Market Line would shift in<u> have a steeper slope </u>manner.
<h3>What is the Security Market Line (SML)?</h3>
The security market line (SML) is the Capital Asset Pricing Model (CAPM). It gives the market’s expected return at different levels of systematic or market risk. It is also called the ‘characteristic line’ where the x-axis represents the asset’s beta or risk, and the y-axis represents the expected return.
<u>Security Market Line Equation</u>
The Equation is as follows:
SML: E(Ri) = Rf + βi [E(RM) – Rf]
In the above security market line formula:
- E(Ri) is the expected return on the security.
- Rf is the risk-free rate and represents the y-intercept of the SML.
- βi is a non-diversifiable or systematic risk. It is the most crucial factor in SML. We will discuss this in detail in this article.
- E(RM) is expected to return on market portfolio M.
- E(RM) – Rf is known as Market Risk Premium.
<u>Characteristics of the Security Market Line (SML) are as below:</u>
- SML is a good representation of investment opportunity cost, which combines the risk-free asset and the market portfolio.
- Zero-beta security or zero-beta portfolio has an expected return on the portfolio, which is equal to the risk-free rate.
- The slope of the Security Market Line is determined by the market risk premium, which is: (E(RM) – Rf). Higher the market risk premium steeper the slope and vice-versa
- All the assets which are correctly priced are represented on SML.
- The assets above the SML are undervalued as they give a higher expected return for a given amount of risk.
- The assets below the SML are overvalued as they have lower expected returns for the same amount of risk.
Therefore, we can conclude that the correct option is A.
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Nations form alliances in order to achieve goals that otherwise wouldn't be possible. For example, NATO, or the North Atlantic Treaty Organization, a coalition of countries in North America and Europe, agree to defend one another in case of attack from an outside party. This is clearly beneficial, because this intergovernmental support both makes an outside attack less probable, and if it occurs, easier to handle. Another example is NAFTA, or the North American Free Trade Agreement. Shared among Canada, the US, and Mexico, this alliance eradicated trade barriers within these countries. Another beneficial alliance, this agreement increases international trade due to lower costs and thus improves the international economy.
Augustine's starting point for his account of the relationship between men and women is the story of the creation and Fall found in Genesis 2-3.
In Genesis 2: 18 God says “It is not good for the man to be alone. I will make a helper suitable for him.” From this Augustine concludes that Eve is made to be Adam's helper. He further deduces that her primary role must be procreation as (in his view) a male companion would be better for every other task. Better for physical labour (stronger) better for conversation (more in common).
'If it were not the case that the woman was created to be man’s helper specifically for the production of children, then why would she have been created as a “helper”? Was it so that she might work the land with him? No . . . a male would have made a better assistant. One can also posit that the reason for her creation as a helper had to do with the companionship she could provide for the man . . . . Yet for company and conversation, how much more agreeable it is for two male friends to dwell together than for a man and a woman! . . .
Answer:
Normative social influence
Explanation:
Normative social influence: In social psychology, the term normative social influence is defined as a form of social influence that often leads to conformity. In other words, an individual conforms according to the other members in a particular group or situation to be liked or accepted by the other person. It is being moderated by social support and group size.
Example: Peer pressure.
In the question above, the statement illustrates the power of normative social influence.
Answer:
Explanation:
s when he is away during war.May 8, 2015
