I think the answer would be d
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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The president 100 years ago was<span> woodrow </span>wilson
An amendment takes an act of two-thirds of Congress and
ratification by three-fourths of the states. The changes in the amendment could
be proposed either in Congress or states. The proposal must have 2/3 of both
houses in congress agreeing to the amendment. Meanwhile, the state must as well
have 2/3 of the state legislatures to propose the amendment. Regardless of
whoever proposed the amendment, it must be ratified by ¾ of the states.
If you are trying to find the opinions of different people in the community then the best data collection techniques would be:
- Interviews
- Questionnaires/ Surveys.
<h3>Data Collection techniques </h3>
- These allow for the collection of information and data for research.
- Certain techniques are better suited for specific data.
To collect the opinions of people on a subject, you need to talk to them or find a way to get them to tell you their opinion. This can be done through interviews and distributing questionnaires.
Find out more on data collection techniques at brainly.com/question/24391436.
