Security Market Line

From ACT Wiki
Revision as of 20:57, 5 February 2018 by imported>Doug Williamson (Layout.)
(diff) ← Older revision | Latest revision (diff) | Newer revision → (diff)
Jump to navigationJump to search


The Security Market Line is a graphical presentation of the Capital asset pricing model formula:

Re = Rf + beta x [Rm-Rf]


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