Answer:
foot-in-the-door
Explanation:
Foot-in-the-door technique: The foot-in-the-door technique is also referred to as FITD. This technique is defined as an individual making or posing a small request formerly to be able to ask for the bigger request from another person later on.
Example: In the question above, as Jennifer is making a small request for a ride to a nearby store and later on she asked for a ride to the attorney's office.
In other words, this is one of the compliance strategy which is directed towards getting an individual to agree for a big request by having the individual agree to a small request first.
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:
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Answer:
Knowing the direction of the wind is an important part of predicting weather because wind brings us our weather. ... The arrow will point to the direction the wind is blowing from so if it is pointing to the east, it means the wind is coming from the east. Additionally, wind direction is where the wind is blowing from.
Explanation:
The right to petition members of the government is technically contained in the first amendment to the Constitution which protects the freedom of speech.
Compared with younger adults, older adults who divorce <span>seldom express regret over leaving an unhappy marriage.
When you're living with a single person for the most of your life, you will make a lot of emotional investment into that relationship which make them regret even for leaving an unhappy environment.</span>
