SML and CML are two very crucial concepts in finance. SML stands forSecurity Market Line, while CML’s full form isCapital Market Line. Both SML and CML relate to the risk and return on investment. Even though the two terms sound familiar and relate to the same thing, in reality, they ...
James R. GarvenThe author is Assistant Professor of Finance at the Pennsylvania State University. the useful comments of James A. Miles, Si‐Wang Ryu, Garry S Shea, and an anonymous referee are gratefully acknowledged. the author accepts full responsibility for any remaining errors....