What is Security Market Line (SML)? How does SML guide in accessing overpriced or underpriced securities? Explain with graphical presentation

1. Statement 1: Financial securities are instruments that can be transferred or sold easily throughestablished financial markets.Statement 2: Financial securities uses physical certificates that sellers (holders) need to seek theapproval and signature of the issuer to be transferred to the buyer.Statement 3: Financial securities are tradeable through established market or over-the counter.Statement 4: Financial securities hold monetary value or face value that is equivalent to their sellingprice.Statement 5: Financial securities are fungible that can be converted into assets or cash.a.All statements are true b.Statements 1, 2 and 3 are true c.Statements 2, 3 and 4 are trued.Statements 3, 4 and 5 are true e.Statements 1, 3 and 5 are true f. Statements 2, 4 and 5 are true 2. Statement 1: Debt securities represent ownership in a firm that would entitle the holders certaindividends and claims in a firm.Statement 2: Equity securities are loans made by the issuing firm that would entitle the…

discuss how a risk management tool can be used to mitigate liquidity risk and credit risk

Organized securities markets   a. are examples of financial intermediaries.     b. are secondary markets.     c. are not subject to regulation.     d. transfer resources from savers to borrowers.