ekanga

Explain the keyword called Security Market Line (SML)?

Can some one explain the Security Market Line (SML). I need it for my exam.
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techy
"Security Market Line (SML): SML estimates the return of a single security relative to its exposure to systematic risk. It helps to find out that whether the expected return on the securities is better than the risk which he is taking. The Security Market Line (SML): Implication of SML for determining the Expected Rate of Return for a Risky Asset • In equilibrium, all assets and all portfolios of assets should plot on the SML • Any security with an estimated return that plots above the SML is underpriced • Any security with an estimated return that plots below the SML is overpriced. Source: http://in.docsity.com/en-docs/Capital_Market_Theory_-_Security_Analysis_and_Portfolio_Management_-_Solved_Quiz_"
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electraxx
"A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky marketable securities. "
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