If investors are reasonably tolerant of risk, the Security Market Line will be relatively flat.

Name: If investors are reasonably tolerant of risk, the Security Market Line will be relatively flat.
Brand: Quizplus
Rating: 4.9 (35 reviews)

Question

Quizplus · Accepted Answer

The Security Market Line (SML) represents the relationship between the expected return of an investment and its risk (beta). If investors are more tolerant of risk, they require less additional return for taking on extra risk, resulting in a flatter SML.

If Investors Are Reasonably Tolerant of Risk, the Security Market