The slope of the security market line is equal to the:
A)market risk premium.
B)risk-free rate of return.
C)market rate of return.
D)market rate of return multiplied by any security's beta, given an inefficient market.
E)market rate of return multiplied by the risk-free rate.

Question

Quizplus · Accepted Answer

The security market line shows the relationship between expected return and beta. The slope of the line represents the market risk premium, which is the additional return investors expect to compensate them for taking on market risk.

The Slope of the Security Market Line Is Equal to The