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kvasek [131]
3 years ago
8

The Security Market Line (SML) shows the relationship between stocks' required rates of return (measured on the vertical axis) a

nd their betas (measured on the horizontal axis). The vertical axis intercept is the required rate of return on a riskless asset, and the required rate of return associated with b = 1.0 is the required rate of return on "the market." The difference between the required rate of return on the market and that on the riskless asset (rM – rRF) is defined as the "market risk premium." The steeper the SML, the larger the market risk premium, and the greater the average investor's aversion to risk. True or false?
Business
1 answer:
natka813 [3]3 years ago
5 0

Answer:

True

Explanation:

The reason is that the straight line equation is used to illustrate the relation between the rate of return and the beta factor and is given as under:

Y = a + bX

Here

a = Rf

B = Risk premium = Rm - Rf

X = Beta Factor

So this means the security market line is the graphical presentation of capital asset pricing model and illustrates why the increase in beta factor increases the required rate of return, the reason is that the the overall required return Y of the investment will start increasing with the increase in the beta factor.

So the statement is true.

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Answer:

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Now let's calculate the expected returns using the percentage given and the corresponding amount.

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Answer:

Allocate sufficient resources and support for the HRX initiative ( B )

Explanation:

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since The main goal of the Head of the Human resources department is to transform the company's production level to a higher level of productivity in a quicker timer frame, dedicating more resources and support to the initiative will help to speed up activities and the company will start producing  at a very fast rate. having to increase salary will not help because the workers can only do what they can do they can't go beyond their limit hence there will be health emergencies.

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nikklg [1K]
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7. What is the possible meaning of the changes in stock price for Berkshire Hathaway on the day of the acquisition announcement
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Answer:

On the same day that announcement came, there have been inflationary pressures, which further indicates that prices are encouraged to demonstrate pointed ups and downs. Further analysis is provided below.

Explanation:

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