The capital market line (CML) uses ____ as a risk measurement, whereas the capital asset pricing model (CAPM) uses ____.
A) beta; total risk
B) standard deviation; total risk
C) standard deviation; systematic risk
D) unsystematic risk; total risk
E) systematic risk; beta

Question

Quizplus · Accepted Answer

The capital market line (CML) uses standard deviation as a risk measurement, whereas the capital asset pricing model (CAPM) uses systematic risk (measured by beta).

The Capital Market Line (CML) Uses ____ as a Risk