Question $2$: $10$ marks

Consider the information given in the Table $2$A and complete Table $2$B$.$ From the completed Table $2B,$ use the information to grpahically present the Security Market Line $($SML$).$ Compute the slope of this line.

Hints:

i$)$ When $100\%$ money is invested in asset $x($portfolio weight $=1),$ the beta of the portfolio is $0\mathrm{.}85$

ii$)$ Since the risk$-$free asset is$,$ well, risk$-$free, its beta will be zero

$2$

Table $2$A

$\backslash$table$[[$Expected return for asset x $(\%),13],[$Risk free rate $(\%),5],[$Beta of asset X$,0\mathrm{.}85]]$

Table $2$B

$\backslash$table$[[\backslash$table$[[$Proportion of portfolio$],[$in Asset X$]],\backslash$table$[[$Expected$],[$portfolio$],[$return$]],\backslash$table$[[$Portfolio$],[$beta$]]],[0\mathrm{.}00,,],[0\mathrm{.}25,,],[0\mathrm{.}50,,],[0\mathrm{.}75,,],[1\mathrm{.}00,,],[1\mathrm{.}25,,]]$