In the equation for the Security Market Line (SML), the slope is represented by: A) R_F. B) $\beta$_i. C) [E(R_M) - R_F] D) $\rho$_i,M$\sigma$_i/$\sigma$_M

Question

Quizplus · Accepted Answer

The slope of the Security Market Line (SML) is represented by the difference between the expected return on the market portfolio and the risk-free rate, which is conceptually similar to choice C. This slope is known as the market risk premium.

In the Equation for the Security Market Line (SML), the Slope