Answer: A. the insufficient justification effect.
Explanation:
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: impression management
Explanation:
This is a technique of putting or portraying a certain behaviour or saying certain words in order to influence how people see you , this will depend on the relationship you want to build with each person .
It plays a role in maintaining friendships, maintaining your relationship with your parents or any other relationships.
How you impress each person depends on the relationship you have with them or the relationship you want to build with them.
With his parents John wants to look like a good child who speaks the right langauge because he probably want them to see him as a person they have raised well and who has listened to what they have taught him.
He portrays moral standards to his parents so that they can be proud of him due to this good impression that he portrays .
To his friends he wants to be considered a funny, relaxed and cool guy who is full of jokes who can keep them entertained .
He wants them to have that cool guy impression of him, so that they can like him .
I think it's D
the desalination process is not very reliable .
hope this helps ! ((':
Answer:
Explanation:
The thermosphere is a layer of Earth's atmosphere. The thermosphere is directly above the mesosphere and below the exosphere. It extends from about 90 km (56 miles) to between 500 and 1,000 km (311 to 621 miles) above our planet.
