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Explain the make-up of attitudes.
Slope of the SML
Measures the trade-off between risk and return in financial markets as depicted by the Security Market Line.
Investors' Risk Aversion
Refers to the level of reluctance exhibited by investors to engage in investments with uncertain outcomes, preferring lower risk options.
Beta Coefficient
An index that gauges the degree of variability or specific risk associated with a security or portfolio in relation to the entire market.
Market Risk
The risk of losses in financial markets due to movements in market prices, affecting a wide range of assets uniformly.
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