Market Line

Market Line

The Market Line can be plotted on the Manager Risk/Return graph. The capital market line is a straight line that can be drawn in any coordinate system where risk is the x-axis and return is the y-axis. The capital market line is the straight line that connects the point for the cash equivalent and the point for the Market Benchmark in this coordinate system. Any point on this line corresponds to a portfolio consisting of part cash equivalent (possibly shorted) and part Market Benchmark.

 
 

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