1.CML stands for large(p) grocery class, and SML stands for Security Market Line.
2.The CML is a communication channel that is used to show the place of return, which depends on stake-free rates of return and levels of risk for a specific portfolio. SML, which is also c totallyed a Characteristic Line, is a graphical representation of the trades risk and return at a given time.
3. champion of the differences between CML and SML, is how the risk factors are measured. While model aside is the measure of risk for CML, Beta coefficient determines the risk factors of the SML.
4.The CML measures the risk done standard deviation, or through a total risk factor. On the other hand, the SML measures the risk through beta, which helps to find the protections risk contribution for the portfolio.
5.While the Capital Market Line graphs define efficient portfolios, the Security Market Line graphs define both efficient and non-efficient portfolios.
6.While calculating the returns, the judge return of the portfolio for CML is shown along the Y- axis. On the contrary, for SML, the return of the securities is shown along the Y-axis.
The standard deviation of the portfolio is shown along the X-axis for CML, whereas, the Beta of security is shown along the X-axis for SML.
7.Where the market portfolio and risk free assets are determined by the CML, all security factors are determined by the SML.
8.Unlike the Capital Market Line, the Security Market Line shows the expected returns of item-by-item assets. The CML determines the risk or return for efficient portfolios, and the SML demonstrates the risk or return for individual stocks.
9.Well, the Capital Market Line is considered to be superior when measuring the risk factors
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