Y-axis intercept of the SML indicates the required return on an individual asset whenever the realized return on an average (b = 1) stock is zero.

Name: Y-axis intercept of the SML indicates the required return on an individual asset whenever the realized return on an average (b = 1) stock is zero.
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The Y-axis intercept of the Security Market Line (SML) represents the risk-free rate, not the required return on an individual asset when the realized return on an average stock is zero.

Y-Axis Intercept of the SML Indicates the Required Return on an Individual