easy · FRM Part 1 Foundations of Risk Management
The Security Market Line (SML) equation is E(R_i) = R_f + β_i [E(R_M) - R_f].
What does the term [E(R_M) - R_f] represent?
- The reward-to-volatility ratio
- The portfolio's alpha
- The market risk premium
- The variance of the market
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