The SML relates required returns to firms' systematic (or market)risk.The slope and intercept of this line can be influenced by a manager's actions.

Name: The SML relates required returns to firms' systematic (or market)risk.The slope and intercept of this line can be influenced by a manager's actions.
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Question

Quizplus · Accepted Answer

the slope and intercept of the SML are determined by the market, generally not the actions of a single firm.However, managers can influence their firms' beta, and thus their firms' required returns.

The SML Relates Required Returns to Firms' Systematic (Or Market)risk