Talk:Security market line

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I rewrote this article because it was essentially taken word-for-word from a copywritten website. The one thing added (a parenthetical "IRR") was used incorrectly. The Internal Rate of Return is used specifially for capital budgeting and is the return required to set an NPV=0; it is not related to the expected rate of return in the SML. 71.195.240.16 07:17, 23 September 2006 (UTC)

[edit] Expected return of security rather than market

When you write "It displays the expected rate of return for an overall market as a function of systematic (non-diversifiable) risk (beta)" my first inclination is that this is okay but not very specific.

The CAPM and security market line (SML) offer a way to value an individual security based upon it's relationship to market returns.

Therefore, it might be more correct to say "It displays the expected rate of return for a security as a function of its risk relative to the market's systematic (non-diversifiable) risk (beta)." —The preceding unsigned comment was added by 68.184.14.76 (talk) 10:52, 4 May 2007 (UTC).