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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
What is the slope of a line that lies perpendicular to a line with a slope of 1 5?
The line perpendicular to a line with a slope of 1/5 has a slope of -5.
When the slope of a line is indefinite?
The slope of a line is undefined if the line is vertical.
Given a line with a slope of 1 7 what is the slope of any line that lies perpendicular to it?
The slope of a line perpendicular to one with slope m is -1/m. So for a line with slope 1/7, any line perpendicular to it will have: slope = -1 / (1/7) = -7
What slope does vertical line have?
A vertical line has a slope of infinity.
