1. Sharpe – Lintner’s model Capital Asset Pricing Model - CAPM

2. Assumptions

3. Market portfolio

4. Market portfolio
It follows that market portfolio consists of all risky assets on the market. All shares appear in it with positive proportions, according their market value.
Real market portfolio?
Usually, market indices are taken as market portfolios surrogates.

5. Risk free asset

6. Combination of the market portfolio and risk free asset

7. Capital Market Line - CML

8. Capital Market Line - CML

9. Security Market Line - SML and Beta

10. SML – Security Market Line

11. Beta

12. Beta

13. Portfolio’s Beta