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Nina [5.8K]
2 years ago
9

Other things held constant, if investors become more risk averse, the security market line (sml) would (2 points)

Social Studies
1 answer:
poizon [28]2 years ago
6 0

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.

Learn more about Security Market Line (SML) on:

brainly.com/question/15877803

#SPJ4

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Answer:

Explanation:

Several years ago we had the good fortune to ask the renowned activist artist Hans Haacke a

question:

How can you know when what you’ve done works?

He thought for a moment, and then replied,

I’ve been asked that question many times, and that question requires one to go around it

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Haacke’s response was meant to be humorous, but beneath it lay a serious problem: a general

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to bring about social change and how to assess that impact remains elusive.1

This is a shaky foundation upon which to construct a rapidly growing field. Art schools have

devoted whole programs to the practice of arts and activism. Since Portland State University

launched the first of such programs, Art & Social Practice in 2007, the School of Visual Arts in

New York has added a department of Art Practice; CalArts: Social Practice & Public Forms; and

Queens College: Art & Social Action. New York University has two graduate programs devoted

to the intersection of arts and activism: Arts Politics in its performing arts school, and Art,

Education and Community Practice in its school of education and fine arts. Regardless of

program and department, university courses on arts and politics abound. In the Fall of 2010

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interconnections between arts, politics and social activism. This academic interest has prompted

a slew of recent books on arts and activism, with a cursory search on Amazon.com under “art

and activism” returning a staggering 1,345 results.

Museums curate entire exhibitions around the practice. In recent years, in New York City alone,

the Brooklyn Museum staged their monumental AgitProp show, the Whitney Museum, offered

up An Incomplete History Of Protest, and the Museum of the City of New York hosted AIDS at

Home, Art and Everyday Activism. Over the past decade, the Queens Museum has centered their

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1

“Artistic Activism,” a term first popularized in scholarship by Chantal Mouffe and in the field by the Center for

Artistic Activism, goes by many names: political art, creative activism, activist art, artivism socially engaged arts,

social practice arts, community based arts, artivism, arte útil, etc., each with slightly different emphases, and a

different place on the art/activism spectrum. What unites them all is the mobilization of both affect and effect.

2

ambitious NYC-based arts institution, organizes yearly “summits” which bring together artistic

activists from around the world. Around the world, from the Disobedient Objects show at the

Victoria and Albert Museum in London to The Art of Disruptions at Iziko South African

National Gallery, arts and activism has become an integral part of the arts scene. No global

Biennale is complete these days without its “social interventions” and the requisite controversy

surrounding the place of activism in the art world.

More important than academic and artistic institutions, however, is the attention turned to the

artistic activism by NGOs and philanthropic funders. Large organizations like the Open Society

Foundations have created new programs like the Arts Exchange to integrate arts into all levels of

their social programming, and smaller foundations like A Blade of Grass, Compton,

Rauschenberg, Surdna, et al. have made the support of arts and activism central to their mission.

Research groups like Americans for the Art’s Animating Democracy, and The Culture Group

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Center for Artistic Activism, Beautiful Trouble, The Yes Labs, Intelligent Mischief, Center for

Story-Based Strategies, Backbone Campaign, to list just a few US examples, work with activists

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But probably most critical of all is the attention paid to the practice by activists themselves. It is

now common in global activist NGOs like Greenpeace to local grassroots groups working on

immigration reform such as the New Sanctuary Coalition in NYC to develop “creative

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