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- 2011-7-11
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- 2013-8-13
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Take notice that the CML uses Std Dev. in it's calculations and the SML uses Beta.
Std Dev measures market risk as well as company specific risk
Beta only measures company specific risk
The CML will show if a stock is over/under valued in relation to the market risk factors whereas the SML will show if the stock is over/under valued in relation to it's company risk factors. |
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