"Characteristics Market Portfolio: • All risky assets must be in portfolio, so it is completely diversified: Includes only systematic risk • All securities included in proportion to their market value • Contains worldwide assets: Financial and real assets Most important implication of the CAPM • All investors hold the same optimal portfolio of risky assets • The optimal portfolio is at the highest point of tangency between Capital Market Line (CML) and the efficient frontier • The portfolio of all risky assets is the optimal risky portfolio • Called the market portfolio. Source: http://in.docsity.com/en-docs/Capital_Market_Theory_-_Security_Analysis_and_Portfolio_Management_-_Solved_Quiz_"
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"The theoretic bunch regarding ventures that includes all types associated with resource accessible in the globe financial market, having every tool measured compared to help its full occurrence available in the market. Your envisioned returning of an grocery store collection is similar towards the predicted return from the grocery store all together. Because a marketplace collection is completely diversified, it is subject matter simply to systematic threat (peril that will impacts industry all together) instead of for you to unsystematic risk (the danger built in to a particular asset category). "
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