Risk preference-sensitivity analysis-capm

Reference no: EM1333060

1. Compare the following risk preferences: (a) risk-averse, (b) risk-indifferent, and (c) risk-seeking. Which is most common among financial managers?

2. Explain how the range is used in sensitivity analysis.

3. Explain the meaning of each variable in the capital asset pricing model (CAPM) equation. What is the security market line (SML)?

Reference no: EM1333060

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