Capital Allocation Line & Capital Market Line: Choosing a Portfolio | CFA® Program Level I

Capital allocation line and capital market line explained visually: the Sharpe ratio, utility, and how to choose a portfolio. ▶ Try a full module of our Level I platform free: https://sharpeandclear.com/go/ef3 ▶ The full Level I course, all 10 topics: https://sharpeandclear.com/?src=yt-ef3 ▶ New to portfolios? Start with video 1 of this series, Portfolio Variance & Diversification:    • Portfolio Variance & Diversification: How ...   ▶ Video 2, the minimum-variance portfolio and the efficient frontier:    • Minimum-Variance Portfolio & the Efficient...   ▶ Next lesson, beta and the CAPM:    • Beta & the CAPM: Systematic Risk, the SML ...   ▶ Full series:    • Portfolio Theory, Explained Visually: Dive...   ▶ All Level I Quantitative Methods videos:    • Level I Quantitative Methods, Explained Vi...   Chapters 0:00 Intro: one portfolio for two opposite investors? 1:22 Our platform 2:00 The capital allocation line (CAL) and the Sharpe ratio 5:37 The steepest line: the optimal risky portfolio 6:49 Risk aversion and utility: where you sit on the line 10:58 The capital market line (CML) and the market portfolio 12:31 Exam-style practice question 13:54 Recap: the CAL and the CML on one card For CFA® Program Level I candidates and finance students: the capital allocation line and its slope, the Sharpe ratio; the optimal risky portfolio; utility, risk aversion and indifference curves; the capital market line and the market portfolio (what to learn by heart); one exam-style practice question. Educational content only, not investment advice. Illustrative data: invented assets and investors. Not affiliated with or endorsed by CFA Institute. CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. #CapitalMarketLine #SharpeRatio #PortfolioTheory