please let me know that all the answer are correct . ( everything in blue are the answer i put)
Also, please show me how the graph should look on excel. i am unable to determine how the graph will look like.
please let me know if my answers are correct. also, how should the new sml line should look like in the graph.
The following graph plots the current security market line (SML) and indicates the return that investors require from holding stock from Happy Corp. (HC). Based on the graph, complete the table that follows: An analyst believes that inflation is going to increase by 2.0% over the next yeac, while the market risk premium will be unchanged. The arialyst uses the Capital Asset Pricing Model (CApM). The following oraph plots the current sM1. Calculate Happy Corpi's new required return. Then, on the graph, use the green points (rectangle symbols) to plot the new SML. suggested by this analyst's prediction Happy Corp.'s new required rate of retam is Tool tip: Mouse over the points on the graph to see their coordinates. Happy Corp.'s new required rate of return is Tool tip: Mouse over the points on the graph to see their coordinates. The SML helps determine the risk-aversion level among investors. The higher the level of risk aversion, the the slope of the SML. Which of the following statements best describes the shape of the SML if investors were not at all risk averse? The SML would have a positive slope, but the slope would be flatter than it would be if investors were risk averse. The SML would have a positive slope, but the slope would be steeper than it would be if investors were risk averse. The SML would have a negative slope. The SML would be a horizontal line. 9. Changes to the security market line The follawing graph plots the current secunty market line (54t).) and indicates the riturn that inveiters require from holding stock from Happy Corp. (BC). Eased on the graph, comolete the table that follows: An analyat believes that intlation is going to increase by 2.0% over the neat wac ahile the market riak gremium will be uinchanged. The analyst uses the Capital Asset Priding Model (CAP44). The following graph plote the curket SveL Calculate Happy Compis new required return. Thec, on the oragh, wee the green points (rectancle srmboli) to plot the new sML, sugoested by this analyst's prediction. Happy Corpi's new required rate of return is Tool tip: Mouse over the points on the graph to see their coordinates. An analyst believes that inflation is going to increase by 2.0% over the next vear, while the market risk premicim wil be unchanged. The analyst uses the Capital Asset Pricing Model (CAPM). The following graph plots the current SML. Calculate Happy Corp.'s new required retum. Then, on the graph, use the green pointi (rectangle symbols) to plot the new SML suigested by this analyst's prediction. Happy Corp.'s new required rate of return is Tool tip: Mouse over the points on the graph to see their coordinates. The SML helps determine the risk-aversion level among investors. The higher the level of risk awersion, the the slope of the SML. Which of the folloning statements best describes the shape of the sHL if investors were not at all risk averse? The SML would have a positive slope, but the slope would be flatter than it would be if invectors were tisk averse. The 5ML would have a positive slope, but the slope would be steeper than it would be if investors were sisk: averse. The stAL would have a negative slope. The SML would be a horizontal line
