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The Slope of the SML Is Determined by Investors' Aversion

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The slope of the SML is determined by investors' aversion to risk.The greater the average investor's risk aversion, the steeper the SML.


Definitions:

Continuous Random Variable

A random variable that can take an infinite number of values within a given range.

Continuous Probability Distributions

Describes the distribution of possible values for a continuous random variable, where any value within an interval can be a possible outcome.

Continuous Random Variable

A variable that can take an infinite number of values within a given range.

Continuous Random Variable

A type of random variable that can take an infinite number of values within a given range, reflecting outcomes of continuous measurements.

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