When the Security Market Line shifts up, the average expected rate of return on investment assets
with given risk levels is increasing.

Question

Quizplus · Accepted Answer

The Security Market Line is a graphical representation of the relationship between risk and return for individual assets or portfolios. When the line shifts upward, it indicates that investors are demanding a higher return for a given level of risk, which in turn increases the average expected rate of return on investment assets with given risk levels. Therefore, the statement is true.

When the Security Market Line Shifts Up, the Average Expected