Answer Posted / rehan rao

In Modern Portfolio Theory, the Security Market Line (SML)
is the graphical representation of the Capital Asset Pricing
Model. It displays the expected rate of return for an
overall market as a function of systematic,
non-diversifiable risk (its beta).

The Y-Intercept (beta=0) of the SML is equal to the
risk-free interest rate. The slope of the SML is equal to
the Market Risk Premium and reflects investors' degree of
risk aversion at a given time.

When used in portfolio management, a single asset is plotted
against the SML using its own beta and historical rate of
return. If the plot of the asset falls above the SML it is
considered to have a good rate of return relative to its
risk (the asset is undervalued by the CAPM, and should be
acquired), and vice versa if it falls below (the asset is
overvalued, and should be sold).

which kind of questions can be asked to a mba in sbi interview?

2118

---

Any idea of Kyoto Protocol Issue?

988

---

Which is the new instrument launched by rbi to protect the saving of poor and middle class people from inflation and insensitive household sectors. What are the general techniques used by sccs?

953

---

what are the main component of bailout funds? what are the limitations of bailout fund?

2303

---

How Does Bankruptcy Help Me In The Short Run?

984

---

what is the short cut to recall the last narration saved for the first ledger in the voucher?

1037

---

What do you know about Deflation?

1040

---

Dear sir plz give d ncfm dp module questions websites otherthan nse

1917

---

How can the inflation be measured?

1083

---

financial managers are responsible for obtaining and using funds in a way that will maximize the value of the firms. Please explain.

2192

---

Expand BSBDA.

1018

---

What is eft?

1039

---

Tell us something about yourself in one minute?

1015

---

How can Banks reduce multi banking with the ultimate aim of increasing profitability?

2328

---

Tell something about open market operations?

1100

---