CFA Practice Question

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CFA Practice Question

The beta is the slope of the ______.
A. capital market line
B. security market line
C. security characteristic line
Explanation: The SCL is a plot of the excess return of the security on the excess return of the market. The beta is its slope.

User Contributed Comments 3

User Comment
ninad123 Security Market Line =Security Characteristic Line,
czar there are difference between the SMl and SCL...kindly check LOS for more information
teje the SML is plot of expected return (y-axis) and beta (x-axis) and the slope is simply e(r) - Rf

The SCL is a plot of excess portfolio return (y-axis) and excess market return (x-axis) and its slope is equal to beta.
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