The Slope of the Security Market Line Is

question 13

Multiple Choice

The slope of the security market line is:

• A) the return on the market.
• B) beta.
• C) the market risk premium.
• D) the risk-free rate.

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Definitions:

Correlation Coefficient

A statistical measure that calculates the strength and direction of a linear relationship between two variables on a scatterplot, ranging from -1 to +1.

Direction of the Relationship

Refers to the causal orientation between variables in research, indicating whether one variable influences or is influenced by another.

Correlation Coefficient

A statistical measure that indicates the extent to which two or more variables fluctuate together.

Life Expectancy

The average period an individual is expected to live, based on demographic factors, health, and medical advancements at a given time.