Definition for : Capital market line
GLOSSARY LETTER
The capital market line links the Market portfolio to the Risk-free asset. For a given level of Risk, no portfolio is "better", i.e. Offering better Risk/Return ratio, than those located on this line. The capital market line is graphically tangent to the Efficient frontier containing the Market portfolio.
(See Chapter 19 The required rate of return of the Vernimmen)
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