Capital Allocation Line - CAL

What is the 'Capital Allocation Line - CAL'

The capital allocation line (CAL) is a line created in a graph of all possible combinations of risky and risk-free assets. Also known as the "reward-to-variability ratio".

BREAKING DOWN 'Capital Allocation Line - CAL'

The graph displays to investors the return they can make by taking on a certain level of risk.

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