The security market line (SML)
A) can be portrayed graphically as the expected return-beta relationship.
B) can be portrayed graphically as the expected return-standard deviation of market-returns relationship.
C) provides a benchmark for evaluation of investment performance.
D) can be portrayed graphically as the expected return-beta relationship and provides a benchmark for evaluation of investment performance.
E) can be portrayed graphically as the expected return-standard deviation of market-returns relationship and provides a benchmark for evaluation of investment performance.

Question

Quizplus · Accepted Answer

The Security Market Line (SML) is indeed graphically represented as the expected return-beta relationship, indicating how much expected return an investment should offer given its risk (beta), and it serves as a benchmark for evaluating investment performance by comparing actual returns to expected returns based on the market risk.