- CFA Exams
- CFA Level I Exam
- Study Session 18. Portfolio Management (1)
- Reading 53. Portfolio Risk and Return: Part II
- Subject 2. Pricing of Risk and Computation of Expected Return
CFA Practice Question
Beta is the slope of the ______.
A. security market line
B. characteristic line
C. efficient frontier
Explanation: Beta is the slope of the characteristic line.
User Contributed Comments 5
| User | Comment |
|---|---|
| ninad123 | Security Market Line = Characteristic Line |
| teje | no they are different |
| luyao | Can someone explain the difference between the SML and a Characteristic Line? |
| mrpman | MRP is slope of SML Beta is slop of characteristic line |
| leon121 | SML graphs the security's expected returns vs the beta. Characteristic line compares security and market return against risk free rate. |