Multiple Choice
Which of the following statements about the difference between the SML and the CML is true?
A) The intercept of the CML is the origin, whereas the intercept of the SML is RF.
B) The CML applies to efficient portfolios, whereas the SML applies to all portfolios or securities.
C) The CML can be downward sloping, whereas that is impossible for the SML.
D) The CML and the SML are essentially the same except for the price of risk.
Correct Answer:
Verified
Correct Answer:
Verified
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