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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Sports personalities are portrayed as public properties, by the media. Their every move, personal life etc., are disclosed by the media. Their life becomes public, and one single negative news about them brings about backlash from the public.
Media should not infringe the personal space of the sportsperson.
Media should not exaggerate the loss of the sportsperson, in any game.
Media should support the sportsperson, and not create their negative image.
Media should help the sportsperson, who have lesser funds, in obtaining sponsorships.
Anorexia nervosa and Bulimia are the correct answers.
Anorexia is a mental illness and severe life-threatening eating disorder where the person presents very low weight due to limiting dramatically his/her energy intake. Bulimia is also a psychological and eating disorder where the person suffering from this disease intakes an exaggerated amount of food and then tries to get rid of the extra calories through non-healthy ways. Even though they can affect anyone at any age, they're a lot more common among young women or girls from Euro-American cultures.
Answer & Explanation:
Political maps are designed to show governmental boundaries of countries, states, and counties, the location of major cities, and they usually include significant bodies of water.
