Examveda
Examveda

Formula written as market risk premium divided by standard deviations of returns on market portfolio is used to calculate

A. capital market line

B. security market line

C. fixed market line

D. variable market line

Answer: Option A

Solution(By Examveda Team)

Formula written as market risk premium divided by standard deviations of returns on market portfolio is used to calculate capital market line. Capital market line (CML) is a graph that reflects the expected return of a portfolio consisting of all possible proportions between the market portfolio and a risk-free asset.

This Question Belongs to Commerce >> Financial Management

Join The Discussion

Related Questions on Financial Management

Investment is the _______________.

A. net additions made to the nation’s capital stocks

B. person’s commitment to buy a flat or house

C. employment of funds on assets to earn returns

D. employment of funds on goods and services that are used in production process