MINDTAP From Cengage Search this course xam 1 224:19 PIMG M a. Substitute this e

Question

MINDTAP From Cengage Search this course xam 1 224:19 PIMG M a. Substitute this expression for beta into the Security Market Line (SML), equation below. This results in an alternative form of the SML Poa PM The correct equation is Select- b. Compare your answer to part a with the Capital Market Line (CML), equation below What similarities do you observe? What conclusions can you drawn? When in this form, the CML and SMLSect The measure of risk in the Selet is apr The measure of risk in the Select is pma, and is Select than for all assets except those which are perfectly positively correlated with the market.

Explanation / Answer

option II is the correct equation

have returns directly related to risk (please provide the options)

CML, SML

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