In the results of the earliest estimations of the security market line by Lintner (1965)and by Miller and Scholes (1972),it was found that the average difference between a stock's return and the risk-free rate was ________ to its nonsystematic risk.

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Both Lintner (1965) and Miller and Scholes (1972) found that the average difference between a stock's return and the risk-free rate was positively related to its nonsystematic risk, meaning that as the nonsystematic risk increased, so did the difference between a stock's return and the risk-free rate. This relationship is consistent with the idea of the security market line, where the expected return on a stock is a function of its systematic risk (beta) and the market risk premium (the difference between the expected return on the market and the risk-free rate). The nonsystematic risk is diversifiable and therefore does not affect the expected return on a stock.

In the Results of the Earliest Estimations of the Security