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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Based on initial claims reports received, most of the claims covered by the company's standard market lines business are for personal lines accounts with nearly half located in Georgia and approximately one-quarter in Alabama.
It meant colleges were private enterprises, focused on competing for students on free market lines.
The net proceeds from the offering will be utilised for general corporate purposes, which may include repaying outstanding borrowings under Newfield's credit facility and money market lines of credit, funding capital expenditures and working capital.
Net proceeds from the offering will be used by the company for general corporate purposes, repaying outstanding borrowings under its credit facility & money market lines of credit, funding capital expenditures as well as working capital.
International: underwrites London market lines as well as global specialty businesses, including Dand O, professional indemnity, surety and credit through Lloyd's and company platforms.
We raised approximately USD815 million of net proceeds through last week's issuance of common stock and repaid all borrowings under our revolving credit facility and money market lines of credit."
The market lines used to be clearer: Companies were either payers or providers; public or private; acute or post-acute.
The survey of more than 400 members of the Professional Insurance Agents of Connecticut, New Hampshire, New Jersey and New York examined market trends in four market lines: Homeowners, Personal Auto, Commercial Property and Commercial Liability.
In the late 1960s, Glatfelter began looking for a way to expand his York, Pa., independent insurance business beyond traditional market lines.
The town centre will be closed to traffic for the day as the bustling food market lines the streets with stalls and a feast for all ages including a skating tomato and mad chefs.
The government that formed last May, led by the Conservative Party, wants to remodel government services along market lines. Private providers and voluntary organizations will be encouraged to run services traditionally offered by the state.