7. (a) i. State the equation of the security market line and, assuming that the market portfolio offers a return in excess of the risk-free rate, use it to derive the betas of the market portfolio and the risk-free asset. ii. Draw a diagram of the security market line relationship iii. What does the security market line indicate about the relationship between risk and return (b) i. By considering two points on the capital market line, determine its equation and comment briefly upon its applicability. ii. Briefly interpret each of the terms in the relationship