Q744
Formula written as market risk premium divided by standard deviations of returns on market portfolio is used to calculate
A.
capital market line
AnswerB.
security market line
C.
fixed market line
D.
variable market line
Answer: Option A
Solution
Answer: Option A
Solution:
Formula written as market risk premium divided by standard deviations of returns on market portfolio is used to calculate capital market line. Capital market line (CML) is a graph that reflects the expected return of a portfolio consisting of all possible proportions between the market portfolio and a risk-free asset.