Security Market Line

Related BrainMass Solutions

• Securities: What expected rate of return would a security earn if it had a 0.6 correlation with the market portfolio and a standard deviation of 3 percent?

  * STDi where E(ri) = the expected return on security i rf = risk-free rate SlopeCML = slope of the Capital Market Line STDi = the standard deviation of security i Since we know the expected return on the market portfolio is 20%, the risk-free

• Capital Market Line

  * STDi where E(Ri) = the expected return on security i Rf = risk-free rate SlopeCML = slope of the Capital Market Line STDi = the standard deviation of security i What we know is: - the expected return on the market portfolio is 20%, - Rf

• Security Market Line (SML). Assume that risk-free rate, Rf is currently 9% and that the market return, Km, is currently 13%. Draw the security market line on a set of "nondiversifaible risk (x-axis)?required return (y-axis)" axes.

  Tasks: Chapter 5: Risk and Return P5-26 Security Market Line (SML) Question Details P5-26 Security Market Line (SML). Assume that risk-free rate, Rf is currently 9% and that the market return, Km, is currently 13% A.

• An Explanation of the Expected Rate of Return

  These two points must lie on the Capital Market Line.

• security market line

  93577 What does the security market line (SML) depict? What does the security market line (SML) depict? It depicts the Relationship between an investment's hurdle rate and its market risk. What does the security market line (SML) depict?

• What expected rate of return would a security earn if it had a 0.6 correlation with the market portfolio and a standard deviation of 3 percent?

  These two points must lie on the Capital Market Line.

• Capital-asset pricing model

  The concepts of Capital market line and Security market line (SML) are employed.

• Characteristic(s) line, regression lines and more...

  "Characteristics line" is another name for the Security Market Line. Definition: A line formed using regression analysis that summarizes a particular security or portfolio's systematic risk and rate of return.

• The security market line depicts:

  195387 The security market line depicts: The security market line depicts: a. A security's expected return as a function of its systematic risk. b. The market portfolio as the optimal portfolio of risky securities. c.