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Business, 07.11.2019 04:31 sarinawhitaker

The security market line (sml) shows the relationship between stocks' required rates of return (measured on the vertical axis) and their betas (measured on the horizontal axis). the vertical axis intercept is the required rate of return on a riskless asset, and the required rate of return associated with b = 1.0 is the required rate of return on "the market." the difference between the required rate of return on the market and that on the riskless asset (rm – rrf) is defined as the "market risk premium." the steeper the sml, the larger the market risk premium, and the greater the average investor's aversion to risk. true or false?

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