Which of the following statements is incorrect?
A) The SML is downward sloping.
B) SML can be used with individual assets or portfolios.
C) The SML depicts the relation between the required return and market risk, as measured by beta.
D) According to SML, assets with betas greater than the market beta of 1 will have larger risk premiums.
E) According to SML, assets with betas less than the market beta of 1 are less risky and will have lower required rates of return.

Question

Quizplus · Accepted Answer

The Security Market Line (SML) is upward sloping, reflecting that higher risk (as measured by beta) is associated with higher expected returns.

Which of the Following Statements Is Incorrect