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Required Rate of Return
The minimum annual percentage return an investor expects to achieve from an investment, considering its risk.
Market Risk Premium
The additional return investors expect to receive from an equity investment over the risk-free rate, compensating for taking on higher risk.
Negative Beta
A measure indicating the inverse relationship between the return of a stock and the return of the overall market.
SML
Security Market Line, a graphical representation of the Capital Asset Pricing Model (CAPM) showing the relationship between the expected return of a security and its risk.
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