- CFA Exams
- CFA Level I Exam
- Topic 9. Portfolio Management
- Learning Module 63. Portfolio Risk and Return: Part II
- Subject 1. Capital Market Theory

###
**CFA Practice Question**

The Capital Market Line reflects risk in terms of ______.

A. beta

B. coefficient of variation

C. standard deviation

**Explanation:**The CML is the line that is tangent to the efficient frontier and has the intercept equal to the risk-free rate. It is plotted on the expected-return versus the standard-deviation plane.

###
**User Contributed Comments**
1

User |
Comment |
---|---|

chuong |
CML examines the exptected return on efficient portfolio and total risk measure by SD, while SML examines the expected return on individual assets ans systematic risk by Beta. |