Monday, September 29, 2008

CML Vs SML

CML Vs SML


1.Capital Market Line (CML) actually represents the expected returns if the efficient portfolios as a function of their volatility which is measured by the standard deviation of their returns whereas the Security Market Line (SML) represents the expected returns of the individual asset as a function of its sensitivity to market fluctuations.

2.CML gives the risk/return relationship for efficient portfolios whereas SML , also part of the CAPM, gives the risk/return relationship for individual stocks.

3.The measure of risk used in CML is standard deviation whereas in SML it is the beta coefficient.

14 comments:

dexrex said...

very helpful sam and i thank you.

Nikhil Kapoor said...

Why have you stop updating it?? you were doing a gr8 job!!!

Unknown said...

V NICE AND V HELPFUL,plzzz upload more topics :)

Unknown said...

Very simple and helpful explanation

Thank you very much

illleeroy said...

Thanks man. Very helpful

Anonymous said...

Thank you! Finally someone who can explain it to humans. Thank you!

Astha said...

Thanks everyone! I am back and will update it very soon.

Unknown said...

I have received good information about CML Vs SML. I like to learn P/E ratio..please share regarding it even I am much more interested to invest in Finance companies in USA - Atlanticus Corp ; Ace Limited is my favorite NASDAQ Listed Co.

Anonymous said...

Thanks for the info.

Unknown said...

thank you. this was great

Anonymous said...

Thank you, this cleared up my confusion.

Anonymous said...

Thank You so much for explaining it!

Smirti Bam said...

Very Nice article . Easy to understand
Difference between CML and SML>

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