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[[File:CML-plot.png|320px|thumb|Capital market line]] ...{cite web|title=CML|url=http://www.nasdaq.com/investing/glossary/c/capital-market-line|website=[[NASDAQ]]|publisher=nasdaq.com|access-date=15 May 2017}}</ref ...

...rns (α)''': Below-average returns that cannot be explained by below-market risk]] ...nterest rate|risk-free return]] and the X-axis is the excess return of the market in general. The slope of the SCL is the security's [[beta (finance)|beta]], ...

'''Exposure factor''' (EF), in [[risk management]], ...cy-and-quantitative-risk-analysis/ Annual loss expectancy and quantitative risk analysis], [[Netwrix]] ...

...the slope dictates the amount of return that comes with a certain level of risk.]] .... The graph displays the return to be made by taking on a certain level of risk. Its slope is known as the "'''reward-to-variability ratio'''". ...

...{cite web|title=The Entrepreneur's Cost of Capital: Incorporating Downside Risk in the Buildup Method|url=http://www.macrorisk.com/wp-content/uploads/2013/ ...pm">{{cite journal|last=Bawa|first=V.|author2=Lindenberg, E.|title=Capital market equilibrium in a mean-lower partial moment framework|journal=Journal of Fin ...

...h the overall stock market ([[Financial risk|risk]]) only on days when the market’s return is negative. Downside beta was first proposed by [[Roy's safety-fi ...th>i</math> and the market <math>m</math>, <math>u_m</math> as the average market excess return, and Cov and Var as the [[Covariance operator|covariance]] an ...

...xpected returns for a [[stock]], stock [[Stock market index|index]] or the market as whole. ...Delta (P/E) </math>'''<ref>Richard Grinold and Kenneth Kroner, "The Equity Risk Premium," ''Investment Insights'' (Barclays Global Investors, July 2002).</ ...

...<math>Q</math>. In [[incomplete market]]s, this is one way of choosing a [[risk-neutral measure]] (from the infinite number available) so as to still maint ...nt that the expected return is <math>r</math>, where <math>r</math> is the risk-free rate. ...

...isk, where the value of the investment is "penalized" as a function of its risk. ...stood by comparison to two other approaches where a penalty is applied for risk: ...

...del assumes an investor who considers that most securities are [[Efficient-market hypothesis|priced efficiently]], but who believes they have information tha ...is proportional to the alpha value divided by the variance of the residual risk. ...

...t of the market, where the scaled portfolio has the same volatility as the market. It is derived from the widely used [[Sharpe ratio]], but it has the signif ...[risk-free interest rate|risk-free rate]]). Thus, RAPA was effectively the risk-adjusted excess return. ...

...for which the investors had to go through bad returns comparatively to the market. ...r performance of the asset is somehow mitigated by the overall loss of the market. Taking the [[ulcer index]] as a direct inspiration, the V2 ratio uses a [[ ...

...entation of ([[frictionless market|frictionless]]) "prices" of assets in a market. It is a [[stochastic process]] in a [[filtered probability space]] <math> ...<math>t</math> such that <math>K_t</math> is the [[solvency cone]] for the market at time <math>t</math>.<ref>{{Cite journal|last=Schachermayer|first=Walter| ...

...ied future time the value of B is at least as great as A. In a [[complete market]] the superhedging price is equivalent to the price for [[hedge (finance)|h ...st2=Schied|first2=Alexander|date=October 8, 2008|title=Convex and Coherent Risk Measures|url=http://wws.mathematik.hu-berlin.de/~foellmer/papers/CCRM.pdf|a ...

...s]] which models the possible trades in the [[Market (economics)|financial market]]. This is of particular interest to markets with [[transaction costs]]. ...F. | doi = 10.1137/080743494 | title = Duality for Set-Valued Measures of Risk | journal = SIAM Journal on Financial Mathematics | volume = 1 | issue = 1 ...

...or '''perfectly nonliquid assets''') are assets that are not traded on the market.<ref>Bodie, Z., Kane, A. and Marcus, A. J., 2014. Investments. McGraw-Hill ...uture labour income (a measure of human capital) is greater than the total market value of traded assets. Human capital is also the nontraded asset that is m ...

...ath>\beta_{im}</math> to the market portfolio return <math>R_m</math>. The market return is defined as the wealth-weighted sum of all investment returns in t Roll's critique makes two statements regarding the market portfolio: ...

...990, argued most [[stock market]] returns are explained by three factors: risk, price ([[value investing|value stocks]] tending to outperform) and company Three commonly used methods to adjust a mutual fund's returns for risk are: ...

{{Short description|Risk of the actual return being below the expected return}} ...00ajmc/page/n17 2]–3}}</ref><ref>{{cite book|title=Essentials of financial risk management|url=https://archive.org/details/essentialsfinanc00kaho|url-acces ...

...used to [[Financial risk management#Investment management|manage portfolio risk]]. ...Vinay Marathe. The prediction of investment risk: Systematic and residual risk. 1975.</ref> Initially they proposed a linear model of beta ...