- CFA Exams
- CFA Level I Exam
- Topic 9. Portfolio Management
- Learning Module 63. Portfolio Risk and Return: Part II
- Subject 4. Applications of the CAPM
CFA Practice Question
The line of best fit for a scatter diagram showing the rates of return of an individual risky asset and the market portfolio of risky assets over time is called the ______.
A. security characteristic line
B. capital asset pricing model
C. security market line
Explanation: The security characteristic line is the line of best fit for a scatter diagram showing the excess rates of return of an individual risky asset and the excess return of the market portfolio of risky assets over time.
User Contributed Comments 2
| User | Comment |
|---|---|
| neelu8 | Proportion of risky asset and market portfolio changes? |
| americade | in other words, it's a beta plot characteristic curve plus Rf |