About this document
Capital Market Line Explained by Mohammed Abrar is a document available to read on EtoBox.
The capital market line (CML) shows the relationship between risk and return for efficient portfolios. It is formed by investors mixing the market portfolio with a risk-free asset to reduce total risk. The point of tangency between the CML and the capital allocation line represents the market portfolio, which offers the highest expected return for its level of risk. All investors will seek to hold the market portfolio or combine it with the risk-free asset to land on the CML.
- Author
- Mohammed Abrar
- Language
- EN