The _____ divided by the beta of the market is equal to the slope of the Security Market Line.
A) Total return of the market.
B) Risk-free rate of return.
C) Real return of the market.
D) Market risk premium.
E) Nominal return of the market.

Question

Quizplus · Accepted Answer

The slope of the Security Market Line (SML) is determined by the market risk premium, which is calculated as the expected return of the market minus the risk-free rate of return.

The _____ Divided by the Beta of the Market Is