- 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. |