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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Answer:
Explanation:
The move from high school to university is one of liberation. There is flexibility to complete projects and courses, as well as other activities, at the university. There are no daily home duties that must be completed. The discipline is not the same as at school. The officials have been replaced. In the case of school, there are mandatory enrollment, commitments, and homework. There is no space for change in the rules.
Answer:
The answer is conventional reasoning.
Explanation:
Lawrence Kohlberg's stages of moral development are considered an adaptation concerning a psychological theory that was established by psychologist Jean Piaget. Kohlberg also began to work in aspects related to this topic in 1958 and he continued studying it throughout his life.
The conventional level of moral reasoning is usually seen in adolescents and adults. Reasoning in a conventional way implies to judge actions' morality through the comparisons between them and the aspects related to views and expectations in society. An important characteristic concerning conventional morality consists of the acceptance of society's conventions about what is wrong and what is right.
In Texas, the more than "more than hundred" agencies have substantial independence from the governor, which means that each agency has more latitude and independence than federal agencies in deciding what was meant by the legislature and in applying the law to unforeseen circumstances.
<h3>What is T
exas Constitution?</h3>
In Texas, the governor has little control over more than a hundred agencies. There are about 200 state agencies, most of which operate independently of the governor.
- Texas constitution provides the legislature with the power to enact any laws deemed deemed appropriate and and essential to carry out its stated duties.
- There is limited Government system. In a limited government, the constitution is subject to the laws of several inferior and superior authorities and may also be enforceable against them.
- The Texas constitution is a state constitution, but since it forbids the federal government from playing a role, we can infer that the federal government's authority is constrained.
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The question is incomplete but;
The aspect of the U.S. Congress which most reflects the constitutional value of republicanism is:
A.Members of the House of Representatives vote according to popular opinion in their districts.
The aspect of the U.S. Congress which most reflects the constitutional value of republicanism is:
Members of Congress often support political positions that mirror voter <span>opinion in their home states.</span>
