answersLogoWhite

0


Best Answer

Underpriced

User Avatar

Wiki User

13y ago
This answer is:
User Avatar

Add your answer:

Earn +20 pts
Q: Do securities that plot above the market line overpriced?
Write your answer...
Submit
Still have questions?
magnify glass
imp
Continue Learning about Math & Arithmetic

Distinguish between above the line media and bellow the line media?

Above the line media is traditional mass media formats, such as tv, radio, bilboards and newspapers. Above the line media is much more expensive than below the line media due to its vast size. Therefore, if it the target market is large and difficult to define use above the line media and if the target market is limited and specific use below the line media. Below the line media is essentially nontraditional media, such as blimps, gifts with purchases, leaflets or banners on shopping carts.


Who is next in line above a priest?

the abbot is next in line above the priest


Is Beta is the slope of the security market line?

yes


What is the branat line?

The Branat line shows the area's on the world map which are MEDC and LEDC. The ones above the line are MEDC and the ones below are LEDC. The ones above the line are rich and the ones below are poorer.


What is the capital asset pricing model?

The CAPM is a model for pricing an individual security (asset) or a portfolio. For individual security perspective, we made use of the security market line (SML) and its relation to expected return and systematic risk (beta) to show how the market must price individual securities in relation to their security risk class. The SML enables us to calculate the reward-to-risk ratio for any security in relation to that of the overall market. Therefore, when the expected rate of return for any security is deflated by its beta coefficient, the reward-to-risk ratio for any individual security in the market is equal to the market reward-to-risk ratio

Related questions

What is china's population below poverty line?

45.8 percent above market


Distinguish between above the line media and bellow the line media?

Above the line media is traditional mass media formats, such as tv, radio, bilboards and newspapers. Above the line media is much more expensive than below the line media due to its vast size. Therefore, if it the target market is large and difficult to define use above the line media and if the target market is limited and specific use below the line media. Below the line media is essentially nontraditional media, such as blimps, gifts with purchases, leaflets or banners on shopping carts.


What are the best priced laptops on the market today?

Some of the best priced laptops are the Sony Vaio line as they offer the best balance between power and affordability. The Apple brand laptops are somewhat overpriced if you're on an budget and should be avoided.


How does capital market line differ from security market line?

From Investopedia.com: The capital market line (CML) is a line used in the capital asset pricing model to illustrate the rates of return for efficient portfolios depending on the risk-free rate of return and the level of risk (standard deviation) for a particular portfolio. The CML is derived by drawing a tangent line from the intercept point on the efficient frontier to the point where the expected return equals the risk-free rate of return. The CML is considered to be superior to the efficient frontier since it takes into account the inclusion of a risk-free asset in the portfolio. The capital asset pricing model (CAPM) demonstrates that the market portfolio is essentially the efficient frontier. This is achieved visually through the security market line (SML). The security market line is a line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky marketable securities. The SML essentially graphs the results from the capital asset pricing model (CAPM) formula. The x-axis represents the risk (beta), and the y-axis represents the expected return. The market risk premium is determined from the slope of the SML. The security market line is a useful tool in determining whether an asset being considered for a portfolio offers a reasonable expected return for risk. Individual securities are plotted on the SML graph. If the security's risk versus expected return is plotted above the SML, it is undervalued because the investor can expect a greater return for the inherent risk. A security plotted below the SML is overvalued because the investor would be accepting less return for the amount of risk assumed.


What is capital market line?

It is discussed in efficient market hypothesis, meaning that you can not beat the market. Capital market line is drawn as a tangent on the curve representing both risky and non risky portfolio. At the point where tangent is drawn represents a model portfolio akin to market. All portfolio above this point has a higher risk reward ratio.


Is Beta the slope of the security market line?

No- the market risk premium is the slope of the Security Market Line (SML).


How do you find old Life Insurance Company of California which was a subsidiary of Insurance Securities Inc.?

Insurance Securities, Inc. is located at Insurance Securities Inc P.O. BOX 500067, 78750-0067 - Austin, TX. That should be your first line of inquiry.


What do you call a yield curve?

The yield curve is basically a line graph that plots the rates for treasury securities of different maturities in a country. It shows the rates of interest that the different securities pay.


When did Northampton to Market Harborough line end?

Northampton to Market Harborough line ended in 1981.


When was Northampton to Market Harborough line created?

Northampton to Market Harborough line was created in 1859.


When was Stoke to Market Drayton Line created?

Stoke to Market Drayton Line was created in 1870.


What is the line above the total called?

The line above the total is called the subtotal. It is referred to as above-the-line. It does not include deductions or taxes.