In the 1972 empirical study by Black, Jensen, and Scholes, they found that the estimated slope of the security market line was _______ what the CAPM would predict.
A)flatter than
B)equal to
C)steeper than
D)one-half as much as
E)None of the options

Question

Quizplus · Accepted Answer

These studies found that the SML was "too flat" compared to CAPM predictions by a statistically significant margin.

In the 1972 Empirical Study by Black, Jensen, and Scholes