Capital Allocation line: slope

CFA Level I Portfolio Management
#1

Hello everyone,

the book states that the Capital Allocation line is:
E(Rp) = RFR + ((E(Ri) - RFR) / SDi) * SDport

the slope is called market price of risk (sharpe ratio)

What I do not get is that if the markets gets more volatile then the curve steepens, but is this because the market price of risk increases?
But if market risk increases then the Sharpe ratio would be less and so flatting the curve and not steepening it

#2

What curve do you mean?

#3

i mean the Capital Allocation Line

#4

What makes you think that if markets get more volatile, CALs steepen?

#5

sorry…

it was because the formula have the standard deviation multiplying the sharpe ratio

But I don´t seem to understand what does it mean that the CAL is more or less steepen?