Security Market Line: Difference between revisions
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imported>Doug Williamson m (Punctuation.) |
imported>Doug Williamson m (Amend Ke to Re.) |
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The Security Market Line is a graphical presentation of the [[Capital asset pricing model]] formula: | The Security Market Line is a graphical presentation of the [[Capital asset pricing model]] formula: | ||
Re = Rf + beta x [Rm-Rf] | |||
Where: | Where: | ||
Re = return on security. | |||
Rf = theoretical [[risk free rate of return]]. | Rf = theoretical [[risk free rate of return]]. | ||
Revision as of 17:01, 24 August 2013
(SML).
The Security Market Line is a graphical presentation of the Capital asset pricing model formula:
Re = Rf + beta x [Rm-Rf]
Where:
Re = return on security.
Rf = theoretical risk free rate of return.
Beta = relative market risk.
Rm = average expected rate of return on the market.
