Lines depicting the tradeoff between risk and expected return for individual securities

B

The Security Market Line (SML) is the line that represents the relationship between the expected return and the systematic risk of individual securities.

The SML shows the expected return that an investor should receive for taking on additional systematic risk. The SML is derived from the Capital Asset Pricing Model (CAPM), which assumes that investors are rational and risk-averse and that they require compensation for taking on additional risk.

The slope of the SML is known as the market risk premium, which represents the additional expected return an investor should receive for taking on systematic risk. The intercept of the SML represents the risk-free rate of return, which is the return an investor can earn without taking on any systematic risk.

Therefore, the correct answer to the question is C. Security Market Line, as it shows the tradeoff between risk and expected return for individual securities. The other answer options are:

A. Value Market Line: This line shows the relationship between the expected return and the beta of a portfolio of stocks.

B. Capital Market Line: This line shows the tradeoff between risk and expected return for a portfolio of risky assets, including stocks, bonds, and other securities.

D. Money Market Line: This line shows the relationship between the expected return and the risk of money market securities, such as Treasury bills.