The risk$-$free rate is $4\mathrm{.}3\%,$ the return on the market $15\%,$ and the beta of a stock is $7.$

Calculate the required rate of return.

Calculate the market risk premium and the security risk premium.

Graph the security market line.

Identify on the graph the market risk premium and the security risk premium.

What is the effect of a decrease in the inflation rate on the SML$?$