- it will not change Question 39 The security market line is defined as the slope of a line relating an individual security's return to the returns of other securities in that firm's primary industry. is determined by the prevailing level of risk-free interest rates minus a risk premium has as its slope the beta of the security provides a picture of the risk-return tradeoff required by diversified investors considering various risky assets. Question 40 The call feature is an advantage to the issuing firm if interest rates increase if the bond has a floating rate