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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Answer:
a. internal locus of control; external locus of control
Explanation:
Those are personality traits that are defined by the individual's beliefs according to the responsibility about his own actions, in the first case <em>"Internal locus of control" </em>supposes a high level of personal independence and a mayor achievement abilities, and the second <em>"External locus of control"</em> is the opposite, in this order of ideas, we would expect Hal not apply to that school because he knows that there are few possibilities to get in, may be for economical reasons or his personal preparation is not enough to the school standards, and in the another side, his desires to get in can be the best motivation to apply without take into account his real possibilities according to his economic situation or his knowledge capacities.
(A) They believed black schools weren't equal to white schools, so the schools should be integrated.
This is the correct answer I got. I hope it helps. :)
The first point of the diagram adds the important detail that the language used is a quotation of an artist, so B is the logical point to add to the diagram.
The option that completes the diagram, then, is the following:
B. The museum argues that the language is not obscene because it has artistic merit.
The danger of making decisions based on intuition is that our <span>emotion</span><span> will be too strong an influence.
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One of the most exceedingly awful things we can do is to construct our choices in light of other individuals' feelings. Most choices we make have an expansive influence – starting a chain of occasions that can influence others.When your qualities are obvious to you, settling on choices winds up less demanding.
