damnit, I thought CML uses Beta.
it is all same concept chewed up 1000 ways, same thing as all performance ratios are the same concept.
ws Wrote: ------------------------------------------------------- > Intergration > RP=correlation X std of mkt X sharpe ratio of > world market. > > Segmenation > RP=Std of mkt X Sharpe ratio of world market. and where do you go from here?
Freshie Wrote: ------------------------------------------------------- > I thought I read through the Emerging Finance > reading from CFAI text last week, but I did not > find these formuals … What am I missing ? Can > someone please quote the page reference in the > CFAI text ? Help please… > I am sounding stupid… but I rather ask now than > later… > Thanks!! > > ws Wrote: > -------------------------------------------------- > ----- > > Intergration > > RP=correlation X std of mkt X sharpe ratio of > > world market. > > > > Segmenation > > RP=Std of mkt X Sharpe ratio of world market. this formulas are from Reading 23, Capital Market Expectations
Thanks Volkovv. I am going read Economics today… it used to be my commute reading 5 months back and I clearly have no idea what I read ! Thanks again!
volkovv (who will for sure pass) is correct CML uses standard deviation SML uses beta
SML = CAPM = Rf + B(Mkt Rate-Rf) right?
ws Wrote: ------------------------------------------------------- > Intergration > RP=correlation X std of mkt X sharpe ratio of > world market. > > Segmenation > RP=Std of mkt X Sharpe ratio of world market. ws, don’t forget the liquidity premium!