Show security market line, Risk Management

Assignment Help:

Q. Show Security market line?

The CML represent the equilibrium relation between the expected return and standard for efficient portfolio. But it does not indicate how individual assets are price in a security market although it is understandable that the securities price move across the portfolio as suggested by the CML it is highly abstract to use such price change for any realistic investment decision. Therefore another appropriate measure is needs to evaluate the risk return the trade off for individual securities.

In case of the individual security the total risk is irrelevant as a portion of it can be diversifies away hence the relevant risk is the systematic risk and the market is expected to be provided a reward for bearing the systematic alone.

W.F Sharpe is able to provide a measure for evolution the systematic risk by his famous beta concept it is a measure of the risk that applies to all assets and portfolio whether efficient or inefficient.


Related Discussions:- Show security market line

Organisational and communication strategy, An organisational and communicat...

An organisational and communication strategy identifying the procurement and looking at the responsibilities, work breakdown, organisational breakdown AND the management of the cul

Finance , #qusuppose that a bank sole business is to lend in two region of ...

#qusuppose that a bank sole business is to lend in two region of the world. The lending in each region Has the same characteristic as in example 21.5 of section 21.8. Lending to

Homework 2, I have already sent my homework yesterday, please respond: from...

I have already sent my homework yesterday, please respond: from email:

Differentiate between implied and historical volatility, Question 1: (a...

Question 1: (a) What are the distinct types of assets under which derivatives can be based upon? (b) Give at least 5 risks that justify the existence of derivatives? Endorse

Risk, Explain how budget planning is related risk management

Explain how budget planning is related risk management

Risk Review, Macville Pty Ltd. Risk management case study

Macville Pty Ltd. Risk management case study

Explain main objectives of a marine park, Question: (i) Describe a Mari...

Question: (i) Describe a Marine Protected Area; what are the types of Marine Protected Areas that exist in the Republic of Mauritius, naming one example of each (ii).

Risk measure, The investment philosophy of Claire can be reflected from her...

The investment philosophy of Claire can be reflected from her comments “I will be satisfied if I just don’t lose money in my portfolio. I am more afraid of losing money than I am

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd