According to the capital asset pricing model, the expected rates of return for all securities and all portfolios lie on the capital market line.

Question

Quizplus · Accepted Answer

According to the Capital Asset Pricing Model (CAPM), the expected rates of return for all securities and portfolios lie on the Security Market Line (SML), not the Capital Market Line (CML). The CML represents the risk-return trade-off for efficient portfolios, while the SML represents the expected return of a security or portfolio in relation to its beta with the market.

According to the Capital Asset Pricing Model, the Expected Rates