The same assets in the mean–volatility plane (left) and the mean–beta plane (right)
rf = 3%rm = 10%σm = 15%
Click an asset to vary its market correlation
σn = 0.50βn = μn =
Capital Market Line
Mean–volatility plane: individual assets lie below the CML
Security Market Line
Mean–beta plane: in the CAPM, all assets lie on the SML
Compare eBay (σn = 30%) and UPS (σn = 35%):
eBay has less total volatility but more systematic risk (βn = 1.45 vs 0.79), so its CAPM expected return μn is higher.