4.1 What is securities market price line and how is it useful in Finance

[Marks 5]

4.2 Using the annualized return of Nifty 500 over the historical period as 18.6% and taking 7.32% as the risk free return, plot the securities market price line.

[Marks 5]

4.3 Using the combination of Tata Elxsi and BDL of 60% 40% and 40% and 60% compare the return and beta of the portfolio to the securities market price line and comment on the same. The return and beta for both will be taken from your solutions to question 3