CFA Practice Question

CFA Practice Question

Which of the following is correct?
A. The SML can be extended to the left of the Y-axis (region of negative beta risk).
B. The SML is a plot of expected returns against the total risk (both systematic and unsystematic) of the asset.
C. The CML is a plot of expected returns against systematic risk (as measured by beta) of the asset.
Explanation: The SML is the plot of expected return against systematic risk (as measured by beta). The CML is a plot of expected returns against the total risk (both systematic and unsystematic) of the asset.

User Contributed Comments 0

You need to log in first to add your comment.