security market line

A line representing the relationship between expected return and systematic risk, thus a graphical representation of the CAPM. It is valid both for portfolios and individual assets.

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  • security market line — Line representing the relationship between expected return and market risk or beta. The slope of this line is the risk premium for beta. Bloomberg Financial Dictionary + security market line The linear relationship between expected asset returns… …   Financial and business terms

  • Security market line — In Modern Portfolio Theory, the Security Market Line (SML) is the graphical representation of the Capital Asset Pricing Model. It displays the expected rate of return for an overall market as a function of systematic (non diversifiable) risk… …   Wikipedia

  • Security market line — Line representing the relationship between expected return and market risk. The New York Times Financial Glossary …   Financial and business terms

  • Security Market Line - SML — A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky marketable securities. Also refered to as the characteristic line . The SML essentially graphs the results from the capital …   Investment dictionary

  • security characteristic line — A plot on a graph of the excess return ( excess returns) on a security over the risk free rate as a function of the excess return ( excess returns) on the market. The slope of this line is the security s beta. Bloomberg Financial Dictionary …   Financial and business terms

  • Security characteristic line — A plot of the excess return on a security over the risk free rate as a function of the excess return on the market. The New York Times Financial Glossary …   Financial and business terms

  • capital market line — noun A line representing the relationship between expected return and standard deviation. See Also: capital allocation line, security market line …   Wiktionary

  • Capital Market Line - CML — A 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 (standard deviation) for a particular portfolio. The CML is derived by… …   Investment dictionary

  • Market portfolio — is a portfolio consisting of a weighted sum of every asset in the market, with weights in the proportions that they exist in the market, with the necessary assumption that these assets are infinitely divisible.[1] Richard Roll s critique… …   Wikipedia

  • 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. The New York Times Financial Glossary …   Financial and business terms

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