Security Market Line

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Revision as of 17:01, 24 August 2013 by imported>Doug Williamson (Amend Ke to Re.)
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(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.


See also