Finance School of management Efficient risk-reward LE(M)-rfI E(r=r+ u In equilibrium, any efficient portfolio should be a combination of the market portfolio and the riskless asset u The best risk-reward depends on how much the market-related a portfolio bears uesTc8 Finance School of Management Efficient Risk-reward s s M M f f E r r E r r [ ( ) ] ( ) − = + u In equilibrium, any efficient portfolio should be a combination of the market portfolio and the riskless asset u The best risk-reward depends on how much the market-related a portfolio bears