The discovery of a financial asset whose expected return is above or below the security market line (SML) would be a signal of:

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The Security Market Line (SML) represents the expected return of a security or portfolio in relation to its risk (beta). If a financial asset's expected return is above or below the SML, it suggests that the asset is offering a higher or lower return than what its risk level would predict. This discrepancy can indicate market inefficiency, as the price of the asset may not fully reflect all available information or the asset's true risk-return profile.

The Discovery of a Financial Asset Whose Expected Return Is