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Q » What is capital market line (CML)?

Steven

06 Dec, 2025

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A » The Capital Market Line (CML) represents the risk-reward profile of efficient portfolios, showcasing the relationship between expected return and standard deviation of an entire portfolio. Originating from the Capital Asset Pricing Model (CAPM), the CML illustrates optimal portfolio combinations, blending risk-free assets with a market portfolio of risky assets, thus enhancing returns for a given level of risk. This line is pivotal in modern portfolio theory and investment strategies.

Michael

06 Dec, 2025

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A »The Capital Market Line (CML) is a graphical representation showing the expected return of a portfolio versus its risk, as measured by standard deviation. It illustrates the trade-off between risk and return for efficient portfolios, helping investors make informed decisions by plotting the risk-free rate and the market portfolio.

David

06 Dec, 2025

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