The correct answer is A (Capital market line).

When investors have homogeneous expectations, the optimal risky portfolio is the market portfolio. Combining the risk-free asset with this market portfolio forms the capital allocation line (CAL). A specific CAL that uses the market portfolio as the optimal risky portfolio is termed the capital market line (CML). The CML plots the expected portfolio return (E(Rp)) against the total risk (standard deviation, σp), with the risk-free rate at the intercept and the slope representing the market risk premium.

• Option B (Security market line) is incorrect because the SML represents the Capital Asset Pricing Model (CAPM), plotting expected return against systematic risk (beta), not total risk.
• Option C (Security characteristic line) is incorrect as the SCL plots the excess return of a security against the excess return of the market, reflecting the security's sensitivity to market movements.