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What is the relationship between the efficient frontier and the Capital Market Line?
please answer the questions with examples if possible.
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- Please draw the Capital Market Line and the Security Market Line. Please write down their function forms and explain the differences between these two lines.What are the assumptions of efficient market hypothesis? Discuss.Identify and explain the functions of Capital Markets with supporting examples?
- Define the following terms, using graphs or equations to illustrate youranswers wherever feasible: c. Capital Asset Pricing Model (CAPM); Capital Market Line (CML)What is the Capital Asset Pricing Model (CAPM)?What are some of its key assumptions? Has itbeen empirically verified? What is the role of theSecurity Market Line in the CAPM?Answer all parts of this question.(a) Discuss the main assumptions of the Capital Asset Pricing Model (CAPM).