5. Define Capital Allocation Line (CAL) and Capital Market Line (CML) and discuss differences between them.
Capital Allocation line (CAL): A graphical representation of Risk Vs Return, wherein the CAL displays the return achieved by taking on a certain level of risk with its slope equalling reward to risk ratio.
Capital Market line (CML): A graphical representation of all the optimally feasible portfolios with a combination of risk free asset and market portfolio.
Differences:
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