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:
Vaccines and Parenting styles
Explanation:
The scientific consensus generally refers to the collective decisions and positions of a large group of scientists in a specific specialization. The formulated different theories, hypotheses, and decisions based on the research studies and findings in the given specialization. It was stipulated that autism spectrum disorder is independent of vaccines the styles of parenting.
Agriculture is the way you make money through farming and ranching
According to Petrarch, the essential qualification for a writer was an appreciation of classical Greek and Roman authors, such as Cicero. Petrarch is considered by many to be the father of the Italian Renaissance. The interest in classical civilizations and Greco-Roman culture reignited a passion for learning and the arts after the Middle Ages. The significance that Petrarch placed on the individual in literature, art, music, poetry, and rhetoric became known as humanism. Today, these subjects are the basis for a classical education in the humanities.
Members of the senior executive service are, in practice, usually assigned to agencies that match their expertise because their experience in specific policy areas is what makes them valuable
<h3>Who are the members of the senior executive service?</h3>
These are the persons in the Country that are known to serve in the capacity that is below the one of the Presidential appointees in the country. These are the people are those that are known to form the link that exists between the appointees and the task force in the country.
They help in the nation by overseeing special duties that have to do with the 75 agencies that are existent in the United States of America.
We can conclude that the senior executive service are, in practice, usually assigned to agencies that match their expertise because their experience in specific policy areas is what makes them valuable
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