Understanding Business
Understanding Business
12th Edition
ISBN: 9781259929434
Author: William Nickels
Publisher: McGraw-Hill Education
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Question 2:
Consider the information given in the Table 2A and complete Table 2B.
From the completed Table 2B, use the information to grpahically
present the Security Market Line (SML). Compute the slope of this
line.
Hints:
i)
ii)
When 100% money is invested in asset X (portfolio weight
1), the beta of the portfolio is 0.85
Since the risk-free asset is, well, risk-free, its beta will
be zero
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Transcribed Image Text:Question 2: Consider the information given in the Table 2A and complete Table 2B. From the completed Table 2B, use the information to grpahically present the Security Market Line (SML). Compute the slope of this line. Hints: i) ii) When 100% money is invested in asset X (portfolio weight 1), the beta of the portfolio is 0.85 Since the risk-free asset is, well, risk-free, its beta will be zero
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