Multiple Choice
Which of the following statement(s) is (are) true regarding the selection of a portfolio from those that lie on the Capital Allocation Line?
A) Less risk-averse investors will invest more in the risk-free security and less in the optimal risky portfolio than more risk-averse investors.
B) More risk-averse investors will invest less in the optimal risky portfolio and more in the risk-free security than less risk-averse investors.
C) Investors choose the portfolio that maximizes their expected utility.
D) A and C.
E) B and C.
Correct Answer:
Verified
Correct Answer:
Verified
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