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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Kinetic energy is the energy the body possesses due to its motion. Kinetic energy is a kind of mechanical energy, as well as potential energy. All bodies that move linearly or rotate possess a certain kinetic energy.
Potential energy is the energy that an object has due to its position relative to another object. When we stand on the top of the building, we have more potential energy than when we are at the bottom, because the earth is attracted by the force of gravity.
When the body falls, it at the beginning of the fall has potential energy due to the force of gravity, and therefore falls, and then the potential energy turns into a kinetic, because the body moves in the fall.
When we kick the ball upwards, it moves upward, because it has kinetic energy, until it stops at one point, since there is no kinetic energy of motion, and only at that moment the kinetic energy turns into a potential, at that moment the ball is stopped, until it starts to fall again.
Correct answers are II. and III.
Answer:
Weathering
Explanation:
Definition: the process of wearing or being worn by long exposure to the atmosphere
Answer:
The answer is A. Conceptual replication
Explanation:
Mark decides to conduct a variation of the original study in which he measures participants' ability to solve verbal analogies as the cognitive task instead of measuring their ability to solve math problems. He finds that people who drink caffeine beforehand solve more verbal analogies than those who drink water beforehand, suggesting caffeine consumption causes improved cognitive performance. This study is known as a conceptual replication
Answer:
Relief is the type of statue that is attached to the background.
The Peloponnesian war was bad for both sides as they suffer great losses and were must more vulnerable to outside attacks.
Explanation:
Relief sculpture is the art form of a non-freestanding sculpture. <u>It is the sculpture presentation attached to the background from which it can’t be separated. </u>The sculpture part “pops out” of the background, and it can be completely attacked, just a tiny bit getting out of the background, or nearly wholly out, but still partly attached. <u>Relief sculptures were often used in ancient art and they were found on many of the Greek temples, presenting various scenes from mythology and history.</u>
Peloponnesian War affected all of Greece and not just Athens which have lost the war. Back in ancient times, Greece wasn’t a singular country under the same government. There were many separate city-states with their own policies but connected with the same belief and language, so they would gather in the case of a foreign attack.
<u>However, the Peloponnesian war affected both Athens and Sparta – both city-states lost many people, many troops, as well as land</u>.<u> While Athens was completely crushed and deprived of its pre-war greatness, both cities suffered losses</u>. They were poorer than before and very crush with the losses. <u>Their mutual protection was also affected. In the case of the foreign attack, they wouldn’t (and couldn’t) protect each other, so they were both very vulnerable and prone to outside attacks. </u>
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