The Capital market Line E( CML e(r
The Capital Market Line E(rp ) CML M E(rM) M
The capital market Line The market portfolio The market portfolio is a portfolio consist ing of all securities where the proportion invested in each security corresponds to its relative market value. The relative market value of a security is simply equal to the aggregate market value of the security divided by the sum of the aggregate market values of all securities
The Capital Market Line The Market Portfolio The market portfolio is a portfolio consisting of all securities where the proportion invested in each security corresponds to its relative market value. The relative market value of a security is simply equal to the aggregate market value of the security divided by the sum of the aggregate market values of all securities