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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The correct answer to this open question is the following.
The statement best shows her role in the New Kingdom is the following:
"Hatshepsut became the first female pharaoh to rule Egypt."
After the death of Pharaoh Thutmose II, the pharaoh's chief wife, Hatshepsut, served as regent to young Thutmose III. She later took over full control and appointed herself as the pharaoh.
Hatshepsut, Tuthmosis III, Amenhotep III, and Tutankhamun ruled Egypt during the New Kingdom.
These ancient Egyptian Pharaohs ruled in what historians call the 18th Dynasty of Egypt. This dynasty started in 1549 BC and ended in 1292 BC, and is considered to be a period of great accomplishments for the Egyptians and exerted so much power in the Nile River region. Its importance was so big at the time that some historians have named this period the Thutmosid era. During this dynasty, Egypt was ruled by two women Pharaohs: Nefemeferuaten and Hatshepsut. Both Pharaohs had a great deal of success in a time where only men used to govern the lands.
Answer: wait explain it in different words is this a question for school for school or something
Explanation:
If this is a true or false question then it’s true.
Answer: Agriculture
Explanation: Mesoamerica is a region in North America that extends from Central Mexico through Belize, Guatemala, El Salvador, Honduras, Nicaragua and northern Costa Rica.
As examples of Mesoamerican cultures we can mention the Maya, Aztecs and Olmec, all of which had agriculture based cultures.
