Discuss the differences and similarities between the security market line (SML) and capital market line (CML).© BrainMass Inc. brainmass.com June 3, 2020, 10:26 pm ad1c9bdddf
CML plots expected return as function of portfolio volatility; SML plots expected return as function of beta. Both are risk/return but CML is total risk and SML is systematic risk
Both are anchored on y-axis at the riskless portfolio; i.e., a riskless asset/portfolio offers neither volatility nor systematic risk. Both contain the market portfolio. On the SML, the market ...
The solution provides the differences between SML and CML.