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.
is a graphical representation of the market’s risk and return at a given time.
Read more: Difference Between CML and SML | Difference Between | CML vs SML http://www.differencebetween.net/business/difference-between-cml-and-sml/#ixzz3WcPumvK1
The SML essentially graphs the results from the capital asset pricing model (CAPM) formula. The x-axis represents the risk (beta), and the y-axis represents the expected return. The market risk premium is determined from the slope of the SML.
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