Which of these is similar to the Capital Market Line, except that risk is characterized by beta instead of standard deviation?
A)Market risk line
B)Probability market line
C)Security market line
D)Stock market line

Question

Quizplus · Accepted Answer

The Security Market Line (SML) is a similar concept to the Capital Market Line (CML), but it characterizes risk with beta instead of standard deviation. The SML represents the expected return of an individual stock or portfolio as a function of its beta, and it shows the required return for the stock given the level of systematic risk in the market. The CML, on the other hand, represents the expected return of a portfolio as a function of its standard deviation, and it shows the required return for any portfolio given the level of total risk in the market.

Which of These Is Similar to the Capital Market Line