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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I really wish you provided the research study. I would be happy to answer. It should be attached to wherever you found this question. Hope this helps :)
It’s education and health so yeah the person who answered this is correct:)
Answer:
content theories; process theories process
Explanation:
Content theory of motivation attempts to investigate gate the factors that bring about or motivate certain behaviors of people Content theory examples can be found in the work of , Abraham Maslow for example and other psychologists.
Process theories of motivation on the other hand explore why behaviors are initiated: all the way from how we choose a target and make moves to achieve it. Operant conditioning is an example of process theory of motivation.
Explanation:
GBV is violence directed against a person because of that person's gender or violence that affects persons of a particular gender disproportionately. Femicide is generally understood to involve the intentional murder of women because they are women, but broader definitions include any killings of women or girls.
