Chapter 11, Problem 19QAP

Summary Introduction

To determine: The Risk Free Rate.

Introduction:

Security Market Line (SML) is a image demonstration of CAPM (Capital Asset Pricing Model). It demonstrates the connection between the expected return of a security and its risk estimated by its beta coefficient.  Expected Return is a process of estimating the profits and losses an investor earns through the expected rate of returns. Standard deviation is apportioned of distribution of a collection of figures from its mean.