QUESTION 4 A security market line [SML]: () explains the co-variance between the returns on the risky asset and the market portfolio. is a graphical representation of the CML. ) is a graphical representation of the CAPM. gives the risk-return relationship for efficient portfolios only ) explains the co-variance between the returns on the risky asset and a riskless asset. QUESTION 5 What is the beta of an asset with an expected return of 16%, if the risk-free rate of interest is 6%% and the expected market portfolio risk premium is 6%? Accurate to two decimal places. -75 O 1.5 O Cannot be calculated. O 1.67 O 2 QUESTION 6 Polycorp is considering a new project. The project has beta (8) that is twice that of the firm's existing assets (projects). Polycorp's existing assets have a required return (cost of capital) of 10%, the market risk premium is 7% and the risk free rate is 4%. Calculate the beta for the new project. Provide your answer accurate to two decimal places. QUESTION 7 The discount rate that should be used to calculate the NPV of a project depends on the business risk of the project, not on the business risk of the firm. True False