Sign up  |  Log in

Why Beta =1 for SML while calculating Slope?

Why Beta =1 for SML while calculating Slope?

thanks

"Using Wiley for my CFA journey was by far the best option… I was able to pass on my first attempt.”– Moe E., Canada

The SML runs through the point for the risk-free asset and the point for the market portfolio.  The market portfolio’s β = 1.

Simplify the complicated side; don't complify the simplicated side.

Financial Exam Help 123: The place to get help for the CFA® exams
http://financialexamhelp123.com/