4. Relating risk and return; a. Write the equation used to find the market risk premium. < L b. Write the equation for the risk premium for an individual stock. c. Write the equation that determines the security market line. d. Use the graph below for the remainder of the questions: 2 2 2 2 2 2 2 2 2 2 3 i. Label the axis ii. Draw the risk free rate into the graph. iii. Select a level of beta, show the risk premium associated with this level of beta. iv. In the graph, show the effects of a decrease in inflation. Label the change with v. Assume the graph above is for a risk loving individual, how would this change if the individual was more risk averse? Label the change with iv. vi. How would a decrease in the portfolio's beta coefficient be seen in the graph above? Label this with v. I