Answered step by step
Verified Expert Solution
Question
1 Approved Answer
7. Which of the following is NOT a major difference between the capital market line (CML) and the capital asset pricing model (CAPM)? a. Definitions
7. Which of the following is NOT a major difference between the capital market line (CML) and the capital asset pricing model (CAPM)? a. Definitions of portfolio risk are based on systematic and total risk. b. One is related to the market portfolio, and the other is not. c. The number of calculations to determine risk is significantly greater for one method. d. One requires a tangency point on the efficient frontier, and the other does not. e. CML measures total risk by the standard deviation of the investment, while the SML considers only the systematic component of an investment's volatility. 8. The capital market line (CML) uses as a risk measurement, whereas the capital asset pricing model (CAPM) uses a. beta; total risk b. standard deviation; total risk c. standard deviation; systematic risk d unsystematic risk; total risk e systematic risk; beta 9. The the number of stocks in a portfolio and the the time period, the the portfolio beta. a. larger, longer, less stable b. larger, longer, more stable c. larger, shorter, less stable d. larger, shorter, more stable e smaller, longer, more stable
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started