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: a) the other committee members are all in favor of the plan.
Explanation:
According to the question's situation, Professor Wang does not support the below-average grade possessing students among the academic standard committee. Whereas other members of the committee want to support them.
So, Professor Wang can vote in favor if all the members of the committee decide to vote in supporting children with below average grade.This will convince Professor Wang as everyone is thinking of favoring students.
Other options are incorrect because discussing his opinion early will not necessarily change opinion of others. Private ballot voting will also lead to support the majority decision and will not include Professor Wang in that decision.Self esteem will not help in favoring students.Thus, the correct option is option(a).
When approaching a roundabout, a driver must yield to traffic coming from the left.
<h3>The correct way to go around Roundabout</h3>
- Always yield to oncoming vehicles in the circle as well as those crossing the street when you approach a roundabout crossroads. Before stepping inside, watch for a traffic pause.
- When an emergency vehicle has a siren, air horn, red or blue flashing light, or all of these, one must surrender the right of way to it.
- Similar to a regular multi-lane intersection, a multi-lane roundabout requires drivers to choose their lanes. Most of the time, the right lane is used to travel straight or make a right turn. Use the left lane if you want to drive straight or turn left.
- The most crucial rule is that, unless there are specific road markings or signs that indicate otherwise, you must give way to traffic already on the roundabout when entering one.
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Roman Catholisism is your answer
