[Answered] If the equation E(ri) = rf + (rf + E(rm) - rf i) is the linear equation for the Security Market ...

This topic contains a solution. Click here to go to the answer

Author Question: If the equation E(ri) = rf + (rf + E(rm) - rf i) is the linear equation for the Security Market ... (Read 254 times)

Mollykgkg

Hero Member
Posts: 529

on: Jul 10, 2018

If the equation E(ri) = rf + (rf + E(rm) - rf i) is the linear equation for the Security Market Line, what portion represents the market risk premium for a stock that does not have a beta of 1.0?

A) i
B) E(rm) - rf
C) rf
D) i E(rm) - rf

Question 2

The ________ is the intercept on the Security Market Line.

A) prime rate
B) risk-free rate
C) market rate of return
D) beta

Need homework help now?

Ask unlimited questions for free

Ask a Question

Marked as best answer by a Subject Expert

Expo

Sr. Member
Posts: 351

Reply #1 on: Jul 10, 2018

Answer to Question 1

Answer: B

Answer to Question 2

Answer: B

Mollykgkg

Hero Member
Posts: 529

Reply #2 on: Jul 10, 2018

Thank you

Expo

Sr. Member
Posts: 351

Reply #3 on: Jul 10, 2018

Happy to help you

« previous next »

Did you know?

In the United States, there is a birth every 8 seconds, according to the U.S. Census Bureau's Population Clock.

Did you know?

Studies show that systolic blood pressure can be significantly lowered by taking statins. In fact, the higher the patient's baseline blood pressure, the greater the effect of statins on his or her blood pressure.

Did you know?

About 80% of major fungal systemic infections are due to Candida albicans. Another form, Candida peritonitis, occurs most often in postoperative patients. A rare disease, Candida meningitis, may follow leukemia, kidney transplant, other immunosuppressed factors, or when suffering from Candida septicemia.

Did you know?

Anesthesia awareness is a potentially disturbing adverse effect wherein patients who have been paralyzed with muscle relaxants may awaken. They may be aware of their surroundings but unable to communicate or move. Neurologic monitoring equipment that helps to more closely check the patient's anesthesia stages is now available to avoid the occurrence of anesthesia awareness.

Did you know?

A recent study has found that following a diet rich in berries may slow down the aging process of the brain. This diet apparently helps to keep dopamine levels much higher than are seen in normal individuals who do not eat berries as a regular part of their diet as they enter their later years.

Sustainable Food Security

How to solve a linear system when the variable is in the denominator position (Question 1 of 2)

How to sketch a quadratic equation that is in standard form (Question 1)

Given the parent function f(x)=log10(bottom exponent)x, state the equation of the function that

Find the equation of the normal line to f(x)=sinx+cosx at x = π.

Suppose the market supply curve is p = 5Q. If price increases from 10 to 15, the change in ...

Author Question: If the equation E(ri) = rf + (rf + E(rm) - rf i) is the linear equation for the Security Market ... (Read 254 times)

Related Topics

Need homework help now?