What determines the vertical intercept of the security

Assignment Help Microeconomics
Reference no: EM13319680

What determines the vertical intercept of the Security Market Line (SML)? What determines its slope? And what will happen to an asset’s price if it initially plots onto a point above the SML?

Reference no: EM13319680

Questions Cloud

Is there a simple way for an actively managed fund : Why is it so hard for actively managed funds to generate higher rates of return than passively managed index funds having similar levels of risk?
Explain a second-order reaction a?b begins at noon : A second-order reaction A?B begins at noon with [A] = 0.1 M. If the rate constant k = 0.033 M-1 s-1, at what wall clock time will [A] = 0.01 M
Suppose that the federal reserve thinks that a stock market : Suppose that the Federal Reserve thinks that a stock market bubble is occurring and wants to reduce stock prices. What should it do to interest rates?
Obtain the centripetal acceleration and centripetal force : A 2.40 kg object rotates around along a horizontal circle of radius r=0.720m. Obtain the centripetal acceleration and centripetal force
What determines the vertical intercept of the security : What determines the vertical intercept of the Security Market Line (SML)? What determines its slope? And what will happen to an asset’s price if it initially plots onto a point above the SML?
If we compare the betas of various investment opportunities : If we compare the betas of various investment opportunities, why do the assets that have higher betas also have higher average expected rates of return?
What volume of oil does the wood displace : A block of wood has a density of 0.55g/cm^3 and mass of 2,500 g. it floats in a container of oil (the oil%u2019s density is 0.85 g/cm^3). What volume of oil does the wood displace
What are mutual funds : What are mutual funds? What different types of mutual funds are there? And why do you think they are so popular with investors?
Explain what is the ph of a solution created by dissolving : What is the pH of a solution created by dissolving 15.0 g of monosodium phosphate NaH2PO4 and 12.0 g of disodium hydrogen phosphate Na2HPO4. The Ka is 6.2*10^-8. How much .2 M NAOH is needed to raise the pH of the solution by .04 units

Reviews

Write a Review

Microeconomics Questions & Answers

  Real exchange rate and the nominal exchange rate

Differentiate the real exchange rate and the nominal exchange rate and describe two reasons why purchasing power parity does not hold for all goods and services.

  How to apply the pareto principle

The irony is that those who are aware of the Pareto principle, do not use it as often as they should in making decisions. Name at least a dozen ways to apply the Pareto principle (the 80/20 rule) that have not been thought of regarding decision-ma..

  Demonstrate competence of economic principles

Frederic Bastiat (1801 - 1850) was a French political economist famous for exploding popular economic misconceptions

  Why industry is confronted with government regulations

Assume that the The World Steel industry wants to expand and that its only option is a merger. Now the industry is confronted with government regulations to oversee the merger. Analyze how the different forces will come together to create a converg..

  Effect of the ua increasing sovereign wealth funds on gdp

What is the effect of the United Arab Emirates' increasing sovereign wealth funds on GDP?

  Depreciation schedule, optimum economic life and after-tax r

An asset is to be used in a project that will last 5 years. The MACRS property class for this asset is 3 years.      If B = l0, 000 and S=3,000 at the end of year 5, determine the depreciation schedule.

  Polluter pays principle versus the precautionary principle

Compare and contrast the two basic approaches to dealing with pollution caused by economic activity: the Polluter Pays Principle versus the Precautionary Principle.

  Question on market consequences of price floor

A price floor is set by the government to protect the producer of the good to which price floor has been attached. There're two possible outcomes for market in price floor setting.

  Explain what principles of economics relate to the decision

Critical Thinking: Last year Congress passed a bill creating a new national health care system that is not yet fully explained. What principles of economics relate to this decision Describe how each relates and what issues must we consider.

  Indierent between alcohol and cigarettes

Assume that every citizen of country X has the utility function of u(x, y) = 5x+4y. Say that x denotes cigarettes and y denotes alcohol. The government of country X receives revenue from alcohol and cigarrete purchases but wants to curb alcohol co..

  Firms and market increase the wealth of poor countries

Should poorer 1rd World nations refuse "models based on economic laws" of universal validity and there are no universal laws. Describe if you agree.

  Describe the innovations in payment arrangements

Now suppose there is another country called Lotech which has not seen the innovations in credit cards and ATMs that Hitech has. If the rate of money growth and the growth rate of real GDP were the same in Hitech and Lotech over this period, then h..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd