The security market line (sml) shows the relationship between stocks' required rates of return (measured on the vertical axis) and their betas (measured on the horizontal axis). the vertical axis intercept is the required rate of return on a riskless asset, and the required rate of return associated with b = 1.0 is the required rate of return on "the market." the difference between the required rate of return on the market and that on the riskless asset (rm – rrf) is defined as the "market risk premium." the steeper the sml, the larger the market risk premium, and the greater the average investor's aversion to risk. true or false?

Cindy recently played in a softball game in which she misplayed a ground ball for an error. later, in the same game, she made a great catch on a very difficult play. according to the self-serving bias, she would attribute her error to and her good catch to her

Financial information that is capable of making a difference in a decision is

Suppose the marginal damage and marginal benefit curves in a polluted neighborhood are md = p/3 and mb = 4 – p. also, suppose that transactions costs are low, so that the consumers and the firm can bargain. we saw that in this case, the socially-optimal level of pollution is achieved. start by computing the socially-optimal p. then, for each of the following cases, compute the amount of money transferred through the bargaining process, and indicate who pays whom (i.e., whether consumers pay the firm, or vice versa). also, compute the gains to each party relative to the status quo (i.e., the starting point of the bargaining process).a)consumers have the right to clean air; firm is dominant in the bargaining process.b)consumers have the right to clean air; consumers are dominant in the bargaining process.c)firm has the right to pollute; firm is dominant in the bargaining process.d)firm has the right to pollute; consumers are dominant in the bargaining proces