capital market line

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Capital market line (CML)

The line defined by every combination of the risk-free asset and the market portfolio. The line represents the risk premium you earn for taking on extra risk. Defined by the capital asset pricing model.

Capital Market Line

In the capital asset pricing model, a line that plots the extra return an investor expects for each change in the level of risk. Rational investors expect higher returns for riskier assets and the capital market line shows this graphically. A portfolio that accurately reflects the capital market line is considered a Markowitz efficient portfolio. The slope of the capital market line is a calculation of the equilibrium market price of risk. See also: Beta.

capital market line

The line used in the capital-asset pricing model to present the rates of return for efficient portfolios. These rates will vary depending upon the risk-free rate of return and the level of risk (as measured by beta) for a particular portfolio. The capital market line shows a positive linear relationship between returns and portfolio betas. Also called market line. See also alpha, beta, systematic risk.
References in periodicals archive ?
The company is targeting the rapidly growing market for Web services along horizontal market lines, including large corporate enterprises, small businesses and workgroups, and individuals who want to deliver on-line Web-based services.
This realignment of sales along market lines allows us to lever new opportunities as they arise," said Gunn.
Key managers have been realigned along market lines instead of product lines, including the creation of two new business units reflecting the company's principal sources of revenues, aerospace and automotive.
The businesses formerly in Effects and Fine Chemicals and Biological Products have been restructured along market lines with beneficial results.
Net proceeds of the issue will be used to repay debt outstanding under several money market lines of credit and to reduce outstanding borrowings under the Canadian portion of Apache's global credit facility.
2Q03 Market Leaders Worldwide IP PBX Shipments Total Market Lines Quarterly Growth Rate % Total line shipments (M) 1.
These lines also permit the company to borrow up to $150 million under money market lines at lower mutually agreeable bid rates.
Other business units in Cone Decorative Fabrics, in addition to Cone Jacquards, are John Wolf and David and Dash, which also style and market lines of decorative fabrics for the home and the furniture industry.
1Q03 Market Leaders Worldwide IP Line Shipments Total Market Lines Quarterly Growth Rate Total line shipments (M) 1.
Our recent reengineering of the firm to deliver services through national market lines of business will assist us in developing new services to meet the needs of our clients and accomplish our growth goal.
In addition to its line of high-quality nutritional products, including unique formulations of vitamins, minerals and antioxidants, USANA offers other wellness products and plans to market lines of biologically-safe skin care products and environmentally-friendly household products.
The decision to reconfigure our organization across segment market lines follows an intensive segment marketing effort over the last three quarters in which market leaders were engaged in new product development," said Ralph Schmitt, Cypress Vice President of Sales and Marketing.