Capital Market Line: Difference between revisions
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#The expected return on such a theoretical portfolio, and | #The expected return on such a theoretical portfolio, and | ||
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*[[Security Market Line]] | *[[Security Market Line]] | ||
*[[Modern Portfolio Theory]] | *[[Modern Portfolio Theory]] | ||
[[Category:Risk_frameworks]] | |||
Revision as of 14:09, 9 October 2013
(CML).
The Capital Market Line considers theoretical portfolios consisting of different proportions of:
- A theoretical risk-free asset, and
- The most efficient portfolio of market assets (also known as the Market portfolio.
The CML is a straight line relationship between:
- The expected return on such a theoretical portfolio, and
- The risk of such a portfolio.
