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The risk - free rate is 4 . 3 % , the return on the market 1 5 % , and the beta of a

The risk-free rate is 4.3%, the return on the market 15%, and the beta of a stock is .7, the required rate of return 11.79%,
1. Calculate the market risk premium and the security risk premium.
2. Graph the security market line. (Please show the actual grpah im having trouble with this one!!!)
3. Identify on the graph the market risk premium and the security risk premium.
4. What is the effect of a decrease in the inflation rate on the SML?

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