If a portfolio is on the CML, it is at equilibrium condition and required rate of return equals expected rate of return.

Question

Quizplus · Accepted Answer

The Capital Market Line (CML) represents portfolios that optimally combine risk and return, meaning that any portfolio on the CML is considered to be at equilibrium where its expected rate of return is equal to its required rate of return, given its level of risk.

If a Portfolio Is on the CML, It Is at Equilibrium