Answer:
if you were lost in the atlantic ocean, it would be helpful to know how many degrees latitude you were from the coast.
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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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Gas masks help protect soldiers from the gas weapons used by the enemy.
The European exploration and conquest of the western hemisphere generated intense social, religious, political and economic competition in Europe, which helped to promote the building of an empire. During that time, they experienced the increase of wealth, power, population and status. Europeans converted many people from the Americas to Christianity. There was a shift from feudalism to capitalism, as well. With the advance of technology, they were also able to organize new international trade strategies.
Answer:
See below.
Explanation:
a) We can conclude that that lack state income taxes and the taxes are not distributed equally around the USA since on Texas state we have a very low tax rate compared iwth the other states.
b) We have that some states in America do not have a considerable state income tax, for example in Texas and Nevada.
c) The taxes for the Texas state is lower compared with the others because the sate promote that companies invest on this special locations in order to generate work and business at the country.
