CAPITAL MARKET LINE (CML) (Encyclopedia)
According to the Markowitz theory, where all assets are risky, the optimal portfolio is the one located in the efficient part of the frontier and it depends on the investor's attitude toward risk.
Capital Market Line
Exhibit 1
The capital market line is the tangent line to the efficient frontier that passes through the risk-free rate on the expected return axis.
capital market line
See also Capital Asset Pricing Model (CAPM)
Related Terms: ...
CAPITAL MARKET LINE (CML) - The line defined by every combination of the risk-free asset and the market...
CAPITAL MARKET RATES - See long-term interest rates.
Capital Market Line This is a graphical line which represents a linear relationship between the expected return and the total risk (standard deviation) for efficient PORTFOLIOS of risky and riskless securities.
Capital Market Line
The line used in the Capital Asset Pricing Model to illustrate the rates of return for efficient portfolios depending on the risk free rate of return and the level of risk (beta) for a particular portfolio.
Capital Market Line - CML
Country beta
Incremental internal rate of return
Inflation-Protected Annuity - IPA
Inflation-Protected Security - IPS ...
See: Capital market line
CMO
See: Collateralized mortgage obligation
CN ...
The slope of the capital market line (CML). Since the CML represents the return offered to compensate for a perceived level of risk, each point on the line is a balanced market condition, or equilibrium.
CMBSSee: Commercial Mortgage Backed Securities CMESee: Chicago Mercantile Exchange CMLSee: Capital market line CMOSee: Collateralized mortgage obligation CMTA See: Clearing Member Trade Agreement CNThe two-character ISO 3166 ...
capital market line A graph derived from the Capital Asset Pricing Model that shows the rates of... capital net worth A company or individual's total assets minus total liabilities.For corporations,...
A description of the risk return relationship for individual securities, expressed in a form similar to the capital market line. Security market line Line representing the relationship between expected return and market risk.
Equilibrium market price of risk The slope of the capital market line (CML). Since the CML represents the expected return offered to compensate for a perceived level of risk, each point on the line is a balanced market condition, or equilibrium.
C - capital asset pricing model, CAPM, capital market line, CML, charting, circularity, common stock, contrarian, cycle
D - data snooping, diagonal model, dividend yield, dynamic pricing ...
The security market line (SML) predicts a simple linear relationship between expected return and standard deviation while capital market line (CML) contributes a relationship between risk free rate and straight line emanating from risk free rate(Rf) ...
 See also: Market portfolio, Expected return, Risk premium, Risk-free asset, Asset pricing model
  
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