Multiple Choice
Which of the following statements is CORRECT?
A) The slope of the CML is (M - rRF) /bM.
B) All portfolios that lie on the CML to the right of M are inefficient.
C) All portfolios that lie on the CML to the left of M are inefficient.
D) The slope of the CML is (M - rRF) /M..
E) The Capital Market Line (CML) is a curved line that connects the risk-free rate and the market portfolio.
Correct Answer:

Verified
Correct Answer:
Verified
Q4: Arbitrage pricing theory is based on the
Q11: Suppose that (1) investors expect a 4.0%
Q13: CAPM is a multi-period model which takes
Q14: stock you are holding has a beta
Q15: Y-axis intercept of the SML indicates the
Q16: investors are risk averse and hold only
Q21: a portfolio of three different stocks, which
Q22: SML relates required returns to firms' systematic
Q39: the returns of two firms are negatively
Q104: stock with a beta equal to -1.0