The slope of the security market line is the ________________.
A) Standard deviation.
B) Portfolio weight.
C) Beta coefficient.
D) Risk-free interest rate.
E) Market risk premium.

Question

Quizplus · Accepted Answer

The slope of the security market line (SML) is the market risk premium, which is the difference between the expected return on the market portfolio and the risk-free rate. This slope represents the reward per unit of risk for investing in the market as a whole.

The Slope of the Security Market Line Is the ________________