Which one of the following is a positively sloped linear function that is created when expected returns are graphed against security betas?
A) Reward-to-risk matrix
B) Portfolio weight graph
C) Normal distribution
D) Security market line
E) Market real returns

Question

Quizplus · Accepted Answer

The positively sloped linear function created when expected returns are graphed against security betas is known as the Security Market Line (SML). It represents the expected return for a given level of risk (measured by beta) and is used in the Capital Asset Pricing Model (CAPM) to determine an asset's expected return based on its risk level.

Which One of the Following Is a Positively Sloped Linear