SML & Beta Finance Question

Business & Finance
Tutor: None Selected Time limit: 1 Day

Please explain - is it the risk free rate apparent from the SML close to the rate on long term government bonds. Why do you think this is?

Apr 5th, 2015

i think he statement is true because That is, by holding many different assets, random fluctuations in the value of one will be offset by opposite fluctuations in another. For example, if one fast food company makes a bad policy decision, its lost customers will go to a different fast food establishment. The investor in both companies will find that the losses in the former investment are balanced by gains in the latter.




Apr 5th, 2015

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