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 options available
A. masculine courage
B. socialization
C. virtue
D. pride in manhood
Answer:
Masculine courage
Explanation:
The Option B is not correct, because Socialization deals basically with interactions of individuals, by mixing with others, and learning to live according to the standard of the society.
The Option C is not, because Virtue has to do with behavior of an individual, that is morally accepted
The Option D is not correct either, because the act of Rudy is not that of pride.
However, Rudy, which is a guy, is trying to show that he is a "man" and he is courageous amd can keep going, regardless of whatever happens or despite having just been treated from concussion.
Hence, the right answer is MASCULINE COURAGE.
At the level of 0.05% significance we can not reject the psychologist's claim. His claim is supported.
Explanation:
When a researcher undertakes a project to do research firstly he takes some random samples. Sample is definite a small group of numbers assume to represent the whole population. Suppose a researcher wants to do research on married couples to find the trend of divorce among them. For that reason he will randomly choose some of the couples and will draw conclusions that inter personal communication reduce the chances of divorce.
Now to establish this experiment as a fact he needs to go through a test of level of significance. Where he will get the result that his statement is established or rejected.
Answer:
Because a lot of things have not yet been discovered and questioned as well as there being billions of things that we have absolutely no knowledge about.
Answer:
so the reason there are so many wind farms here in the mid west is because we live in a "valley" next to the rocky mountains so the air blows down the mountain and into the "valley"
Explanation:
