The Y intercept, where the value of is 0, is referred to as the risk-free rate. The slope of the line is the market-risk premium (MRP). This shows how much additional return an investor can expect as compensation for taking on more risk.

This relationship can be summarized asE(r_i)= r_f+ _i* (E[R_Mkt]-r_f).

but "who draws the line?" ... who sets the risk value? If you are investing, do you go with conventional wisdom ... or do you set your own risk value/SML line?