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QUESTION FIVE (a)(i)Why that Security Market Line is a straight line? (ii) What is the Capital Asset Pricing Model? (iii)What are the differences between the

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QUESTION FIVE (a)(i)Why that Security Market Line is a straight line? (ii) What is the Capital Asset Pricing Model? (iii)What are the differences between the Capital Market Line and Security Market Lin e? (b) XYZ Ltd has in issue 200,000;100/= par value bonds with coupon rate of 14% paid a nnually. The bonds have 20 years to maturity. Find the cost of the bond assuming a curr ent market value of 96/= and taxation rate of 30%

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