- 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 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. |