Explain why the reward-to-risk ratio

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1. 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?

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

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

Reference no: EM13812361

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