zhaoyp

Okay folks, see this: CFAI Vol6 Page 579, lines 5 and 6

"The SML is the equation that specifies the required/expected return for a security that is implied by the CML when the market is in equilibrium."

This statement is part of a vignette, and is a TRUE statement as answered in Q 14 later.

Now, doesn't this statement imply, in equilibrium, a security that lies on SML would also lie on CML ?

I answered this question incorrectly, and haven't yet figured why the statement should be TRUE !!!!