The Security Characteristic Line (SCL) is a graphical representation that shows the relationship between the returns of a security and the returns of a market portfolio. The SCL is obtained by regressing the security's returns against the market portfolio's returns, and the slope of the line represents the security's beta. A beta of 1 means the security has the same volatility as the market, while a beta greater than 1 indicates the security is more volatile, and a beta less than 1 indicates the security is less volatile than the market. The SCL is commonly used in the Capital Asset Pricing Model (CAPM) to determine the expected return on an investment based on its level of risk.