The security market line can be thought of as expressing relationships between required rates of return and:

A) the time value of money.
B) beta which reflects market risk.
C) total risk.
D) portfolio diversification.

Security Market Line

A graphical representation used in the Capital Asset Pricing Model to show the relationship between expected return and beta (risk) of an investment.

Required Rates of Return

The lowest yearly return percentage on an investment required to attract individuals or businesses to invest in a specific security or project.

Time Value of Money

The understanding that money present right now has a higher worth compared to the same sum obtained at a later date, as it has the ability to accrue more earnings.