Why reward-to-risk ratio must be equal for all securities

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Reference no: EM13918543

Given that higher risk investments, such as small-company stocks, have outperformed other investments over time, why don't all investors choose to invest only in these high risk securities?

Explain why the reward-to-risk ratio must be equal for all securities if the financial markets are efficient.

Could the security market line have a negative slope? What would it mean if it did?

Reference no: EM13918543

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