Hi Brave Ones, Hope everyone is fine, I need just a theoretical clarification: why do the CML considers total risk (stdev) if investors hold the optimal market portfolio, as do the investors on SML do. But in the latter case they only “care” about systematic risk… Don’t both equations SML and CML use optimal market portfolios? If yes, why do they measure risk in different ways? well, really appreciate, as always, all your valuable comments. keep up with the EFFORT! tigas

SML is a graph of the required return of a security based on beta, not sure where the optimal portfolio concept would come into play here.

Well for CML, you are measuring the risk of the portfolio which has to measure both systematic and unsystematic risk. But you are only measuring systematic risk because unsystematic risk has been diversified away. For SML, you are measuring the risk of a security towards the portfolio. The key difference is that for CML you are measuring risk of the portfolio, and for SML, the risk of the security.