The beta coefficient is best defined as:

Multiple Choice

• Principle stating that the expected return on a risky asset depends only on that assets systematic risk.

• Equation of the SML showing the relationship between expected return and beta.

• The amount of systematic risk present in a particular risky asset relative to an average risky asset.

• Slope of the SML, the difference between the expected return on a market portfolio and the risk-free rate.

• Positively sloped straight line displaying the relationship between expected return and beta.