Asset Asset A Asset B Rate of Return 12% 5% Beta 9.1% 1.00 0.00 Asset C 1. Draw the security market line (SML) and point the assets on the SML? (ri = Rf + Bi(Rm-Rf)) 0.91 2. As a result of recent economic events, inflationary expectations have declined by 2%, lowering the required returns on the assets by 2%. Draw the new SML. d. As a result of recent events, investors have become more risk-averse, causing the market return to rising by 1%. Ignoring the shift in part b, draw the new SML. I would like to ask you to show the security market line by drawing, not verbally. Can you draw SML for all questions?
Asset Asset A Asset B Rate of Return 12% 5% Beta 9.1% 1.00 0.00 Asset C 1. Draw the security market line (SML) and point the assets on the SML? (ri = Rf + Bi(Rm-Rf)) 0.91 2. As a result of recent economic events, inflationary expectations have declined by 2%, lowering the required returns on the assets by 2%. Draw the new SML. d. As a result of recent events, investors have become more risk-averse, causing the market return to rising by 1%. Ignoring the shift in part b, draw the new SML. I would like to ask you to show the security market line by drawing, not verbally. Can you draw SML for all questions?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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15
Transcribed Image Text:Asset
Asset A
Asset B
Asset C
Rate of Return
12%
5%
9.1%
Beta
1.00
0.00
0.91
1. Draw the security market line (SML) and point
the assets on the SML? (ri = Rf + Bi(Rm-Rf))
2. As a result of recent economic events,
inflationary expectations have declined by 2%,
lowering the required returns on the assets by
2%. Draw the new SML. d. As a result of recent
events, investors have become more risk-averse,
causing the market return to rising by 1%.
Ignoring the shift in part b, draw the new SML.
I would like to ask you to show the security
market line by drawing, not verbally. Can you
draw SML for all questions?
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