Question Completion Status QUESTION 5 Copy of Figure 7.12 Security market line Security morhet 17.5 A 2 15.0 Assal 1 12.5) 51. 10.0 03 1.0 Kink (0) Which of the following statements is correct. Note there may be more than one correct. The slope of the SML can be calculated by referring to any two points on the SML, for example the points representing Assets 1 and 2. Slope is equal to difference in return divided by difference in beta (.175-125)(1.5-5). DA risk averse investor would invest only in the riskfree asset as it has no risk. If Asset 2 has an IRR greater than 15%, then it must be accepted according to the SML and the firm objective of maximising value. O All projects plotting on the SML have an NPV of zero Asset 2 is a better investment than Asset 11 O if we combine Asset 1 and Asset 2 in equal proportions, then the portfolio beta would be one. DA project with a beta of 1.3 requires a return greater than 16.5% in order to add value. Expadeda E www