Final answer:
The Security Market Line (SML) is the graphical representation that displays the expected return of a security as a function of its beta, illustrating the trade-off between risk and return.
Step-by-step explanation:
The graphical representation of expected return and beta is the Security Market Line (SML). The SML is a line that shows the relationship between the expected return of a security and its risk as measured by beta. In this context, beta represents the systematic risk of the security in relation to the overall market. Stocks with a higher beta are seen as riskier and thus typically offer a higher expected return, as per the capital asset pricing model (CAPM).
On the SML graph, the vertical axis represents the expected return, and the horizontal axis reflects the security's beta. Where the SML intersects the y-axis indicates the risk-free rate - this is the expected return of an asset with a beta of zero. The slope of the SML is determined by the market risk premium, which is the additional return investors expect for taking on higher risk relative to the risk-free rate.