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The Capital Market Line (CML) expresses the riskreturn trade-off for a portfolio as follows: () = + [ () ] Required: a. Extend this expression

The Capital Market Line (CML) expresses the riskreturn trade-off for a portfolio as follows: () = + [ () ]

Required: a. Extend this expression to allow for the evaluation of any individual risky Asset

i. Explain the steps in details.

(6 marks) b. What are the similarities and differences between the Capital Market Line and Security Market Line as models of the risk-return trade-off?

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