The intercept point of the security market line is the rate of return which corresponds to:
A) The risk-free rate of return.
B) The market rate of return.
C) A value of zero.
D) A value of 1.0.
E) The beta of the market.

Question

Quizplus · Accepted Answer

The intercept point of the Security Market Line (SML) represents the risk-free rate of return, which is the return expected from an investment with zero risk.

The Intercept Point of the Security Market Line Is the Rate