A graph relating risk (as represented by the market portfolio's beta) and the required return for the market portfolio. This is a positive, linear relationship that originates from the Capital Market Asset Pricing theory which states that all investors will own the market portfolio (as opposed to single securities). However, the amount of risk they will take on is positively correlated to expected return, where expected return = risk-free rate + portfolio beta * (the difference between the expected returnon the market as a whole and the risk-free rate).
Related information about capital market line:
- Capital market line - Wikipedia, the free encyclopedia
Capital market line (CML) is the tangent line drawn from the point of the risk-free asset to the feasible region for risky assets. The tangency point M represents the ...
- Capital Market Line (CML) Definition | Investopedia
A line used in the capital asset pricing model to illustrate the rates of return for efficient portfolios depending on the risk-free rate of return and the level of risk ...
- Capital market line (CML) - YouTube
Nov 3, 2008 ... The capital market line is determined by a mix of: the riskfree asset and the market portfolio. The market portfolio, in turn, consists of all risky ...
- Capital Market Line - Financial Dictionary - The Free Dictionary
The line defined by every combination of the risk-free asset and the market portfolio. The line represents the risk premium you earn for taking on extra risk.
- How does capital market line differ from security market line
The capital market line (CML) is a line used in the capital asset pricing model to illustrate the rates of return for efficient portfolios depending on the risk-free rate ...
- Capital Market Line
James Tobin (1958) added the notion of leverage to portfolio theory by incorporating into the analysis an asset which pays a risk-free rate. By combining a ...
- What is capital market line? definition and meaning
Definition of capital market line: A graph relating risk (as represented by the market portfolio's beta) and the required return for the market portfolio. This is a ...
- Capital Market Line and the efficient frontier | ThinxLabs
Jun 19, 2012 ... Capital Market Line, Efficient Frontier , Capital Allocation Line and the Securities Market Line - all explained plus an excel spreadsheet.