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Which statement is not true regarding the capital market line (CML) and the security market line (SML) ?

A. The risk measure for the CML is standard deviation, while it is the beta for the SML.
B. Both CML and SML have a positive slope.
C. Portfolios on the CML are efficiently diversified.
D. All securities lie on the SML in CAPM. E. Portfolios below the CML are overpriced.

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Answer:

The correct choice is D)

All securities DO NOT lie on the Securities Market Line (SML) in the capital asset pricing model (CAPM).

Explanation:

The security market line (SML) is a line drawn on a chart that portrays a graphical representation of the capital asset pricing model (CAPM)—which shows various degrees of market risk, for different marketable securities, plotted against the expected return of the entire market at any given time.

Cheers!

The correct Option is D) All securities DO NOT lie on the Securities Market Line (SML) in the capital asset pricing model (CAPM).

What is Capital Market Line?

When The security market line (SML) is a line illustrated on a chart that portrays a graphical representation of the capital asset pricing model (CAPM) which displays various degrees of market risk, for different marketable securities, plotted and also against the expected return of the entire market at any given time. So The Correct Option is 'D'

Find more information about Capital Market Line here:

https://brainly.com/question/1159116

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