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. Recall that the security market line (SML) illustrates the relationship between systematic risk and expected returns. Perhaps the most famous and practical application of

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. Recall that the security market line (SML) illustrates the relationship between systematic risk and expected returns. Perhaps the most famous and practical application of the SML is the capital asset pricing model (CAPM). expressed as follows: a. Explain each of the variables. b. Describe B in more detail, including its effect on the expected return on the investment What would a beta of 1.5 suggest

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