Asked by Makaylee Wright on Jul 13, 2024
Verified
The graph of the relationship between expected return and beta in the CAPM context is called the ________.
A) CML
B) CAL
C) SML
D) SCL
Expected Return
The anticipated profit or loss an investment is predicted to generate, acknowledging the potential for volatility and risk.
Beta
A means to compare the stability and risk factor of a security or portfolio relative to the market as a whole.
SML (Security Market Line)
A line that represents the expected return of an investment as a function of its risk, with the risk measured by the investment's beta.
- Comprehend the fundamental principles and elements of the Capital Asset Pricing Model (CAPM).
Verified Answer
LA
Lailomaah AchakzaiJul 20, 2024
Final Answer :
C
Explanation :
The graph of the relationship between expected return and beta in the CAPM context is called the Security Market Line (SML), not CML (Capital Market Line) or CAL (Characteristics Line) or SCL (Security Characteristic Line).
Learning Objectives
- Comprehend the fundamental principles and elements of the Capital Asset Pricing Model (CAPM).