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According to the security market line, a security with a beta of 1.5 should provide a risk premium that is _________ times the risk premium existing for the market as a whole.
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According to the security market line, a security with a beta of 1.5 should provide a risk premium that is _________ times the risk premium existing for the market as a whole.

User Mustafa Lokhandwala
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Answer: 1.5

Explanation: Security market line shows different levels of systematic, or market, risk of various marketable securities plotted against the expected return of the entire market at a given point in time. According to the security market line, a security with a beta of 1.5 should provide a risk premium that is 1.5 times the risk premium existing for the market as a whole.

User Comdiv
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