The slope of the SML is determined by investors' aversion to risk. The greater the marginal investor's risk aversion, the steeper the SML.

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This is a widely accepted theory in finance known as the Capital Asset Pricing Model (CAPM). The slope of the SML represents the expected return for a given level of risk, and it is based on the trade-off between risk and return that investors make. According to the CAPM, the slope of the SML reflects the market's consensus view of risk and return, and it is determined by the risk aversion of the marginal investor. If the marginal investor is more risk-averse, they will demand a higher expected return for a given level of risk, and the SML will be steeper. Conversely, if the marginal investor is less risk-averse, they will accept a lower expected return for a given level of risk, and the SML will be flatter.

The Slope of the SML Is Determined by Investors' Aversion