- CFA Exams
- CFA Level I Exam
- Study Session 18. Portfolio Management (1)
- Reading 53. Portfolio Risk and Return: Part II
- Subject 3. The Capital Asset Pricing Model

###
**CFA Practice Question**

Which of the following statements is incorrect?

A. Markowitz used standard deviation to measure risk, not beta.

B. The CAPM uses beta as the measure of risk.

C. The security market line uses standard deviation to measure risk.

**Explanation:**The security market line (SML) is the graph of the CAPM equation. It uses beta, not standard deviation, to measure risk.

###
**User Contributed Comments**
0

You need to log in first to add your comment.