This definition of law is known as legal positivism.This philosophy lays a greater emphasis on the conventional nature of law and it is associated with positive norms which are made by the legislatures.Afterward, these laws are considered as common laws which must be enforced.
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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Convert to improper fraction (multiply whole number by denominator and add numerator, keep the denominator)
5 1/4 = 21/4
4 1/2 = 9/2
Multiply 9/2 by 2/2 to get the same denominator = 18/4
Subtract the numerators, keep the denominator.
21/4-18/4 = 3/4.
Answer:
life insurance , health insurance , extend health care
Explanation:
The Federal Reserve System was created in the early 1900s in an effort to decentralize the central bank. The founders did not want one central bank located in New York or Washington, DC, so they formed a system with 12 district banks. The second reason for the Federal Reserve System was that communication and transportation were much slower and less efficient than today. In an effort to maintain control and offer assistance to member banks, it was necessary to disperse Federal Reserve facilities across the country.
