An Investor Who Wishes to Form a Portfolio That Lies

Multiple Choice

An investor who wishes to form a portfolio that lies to the right of the optimal risky portfolio on the capital allocation line must

A) lend some of her money at the risk-free rate.
B) borrow some money at the risk-free rate and invest in the optimal risky portfolio.
C) invest only in risky securities.
D) borrow some money at the risk-free rate, invest in the optimal risky portfolio, and invest only in risky
E) Such a portfolio cannot be formed.