Capital Market Line

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Revision as of 14:09, 9 October 2013 by imported>Doug Williamson (Category added 9/10/13 and spacing)
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(CML).

The Capital Market Line considers theoretical portfolios consisting of different proportions of:

  1. A theoretical risk-free asset, and
  2. The most efficient portfolio of market assets (also known as the Market portfolio.


The CML is a straight line relationship between:

  1. The expected return on such a theoretical portfolio, and
  2. The risk of such a portfolio.


See also