Your Client, Bo Regard, Holds a Complete Portfolio That Consists

Multiple Choice

Your client, Bo Regard, holds a complete portfolio that consists of a portfolio of risky assets (P) and T-Bills.The information below refers to these assets. What is the equation of Bo's capital allocation line

A) E(r_C) = 7.2 + 3.6 × Standard Deviation of C
B) E(r_C) = 3.6 + 1.167 × Standard Deviation of C
C) E(r_C) = 3.6 + 12.0 × Standard Deviation of C
D) E(r_C) = 0.2 + 1.167 × Standard Deviation of C
E) E(r_C) = 3.6 + 0.857 × Standard Deviation of C