Security market line
Line representing the relationship between expected return and market risk.
Similar financial terms
Variable price security
A security, such as stocks or bonds, that sells at a fluctuating, market-determined price.
SECURITY MARKET LINE (SML)
Starting from the CML and assuming all the hypotheses of CAPM, one of the fundamental results is the derivation SML.
Security Market Line A linear relationship between the expected rate of return on a security and its SYSTEMATIC RISK indicated by BETA.
Security Market Line
A formula that depicts the risk-return trade-off for securities. The formula can be used to calculate the expected return on a stock or an equity fund.
Segregated Funds ...
Security market line
The SML essentially graphs the results from the capital asset pricing model (CAPM) formula. The x-axis represents the risk (beta), and the y-axis represents the expected return.
Security Market Line - SML
Treynor Ratio
Two-factor model
Zero-Beta Portfolio ...
SML (Security Market Line) Line representing the relationship between required return and beta.
Small Cap Stocks Stocks of companies that have small capitalization, i.e., those that are small in terms of market value.
security market line The relationship between an investment's hurdle rate and its market risk. SEDOL Acronym for The Stock Exchange Daily Official List number, which refers to a...
Related: margin Security deposit (maintenance) Related:Maintenance margin security market line (SML). A description of the risk return relationship for individual securities, expressed in a form similar to the capital market line.
In fact, the theory (such as the Capital Asset Pricing Model and the Security Market Line) is that taking on more (compensatable) risk in an efficient manner will lead to a higher expected return.
Investors can also draw a Security Market Line (SML) for graphical representation of CAPM. It is a straight sloppy line (resembling '/ ') giving the relationship of risk and return. X-axis is the risk or beta and Y-axis is the expected market return.
CAPM establishes the well-known Security Market Line which captures this risk-return relationship. The line starts at the risk-free rate of return for which beta is equal to 0. For the business investment market in general, beta equals 1.
Related: Maintenance margin security market line (SML). A description of
the risk return relationship for individual securities, expressed in a form similar to the capital market line.
Strip mortgage participation certificate (strip PC) ...
A measure of the vertical distance of a portfolio's performance above or below the security market line at that individual security's (or mutual fund's) respective level of risk.
Regression Basics For Business Analysis
The Linear Regression Of Time and Price
CFA Level 1 - Security Market Line and Beta Basics
CFA Level 1 - Correlation and Regression ...
The creditor's right to take property or a portion of property offered as security.
Security market line ...
End calculation of the Capital Asset Pricing Model is conveyed graphically by the security market line (SML).
 See also: Expected return, Banks, Coefficient, Asset pricing model, Bills
  
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