The steeper the slope of the security market line, the greater the degree of risk aversion.

Name: The steeper the slope of the security market line, the greater the degree of risk aversion.
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The slope of the security market line represents the market risk premium, which in turn is a measure of the risk aversion of the market. A steeper slope indicates a higher market risk premium, which suggests that investors are more risk-averse and demand a higher return for taking on more risk.

The Steeper the Slope of the Security Market Line, the Greater