Q795
Relationship between risk and required return is classified as
A.
security market line
AnswerB.
required return line
C.
market risk line
D.
risky return line
Answer: Option A
Solution
Answer: Option A
Solution:
Relationship between risk and required return is classified as security market line. The security market line (SML) is a line drawn on a chart that serves as a graphical representation of the capital asset pricing model (CAPM), which shows different levels of systematic, or market, risk of various marketable securities plotted against the expected return of the entire market at a given point in time.