What is capital market line？

The Capital Market Line (CML) is a graphical representation of the risk-return tradeoff for efficient portfolios, where the risk is measured by the standard deviation of returns and the return is measured by the expected return. It is a straight line that connects the risk-free rate of return to a point on the efficient frontier that represents the optimal portfolio for a given level of risk. The CML is used to determine the expected return for a portfolio that is a combination of the risk-free asset and the optimal portfolio on the efficient frontier. The slope of the CML is the market risk premium, which is the additional return investors require for taking on systematic risk.