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In the capital asset pricing model (CAPM), a security market line (SML): A shows the effect of portfolio diversification on market risk. B represents the
In the capital asset pricing model (CAPM), a security market line (SML): A shows the effect of portfolio diversification on market risk. B represents the weighted average of the expected returns of all the investments composing that portfolio. provides a benchmark for evaluating the relative merits of different stocks or portfolios. indicates the degree to which two stock returns move together in a portfolio
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