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Which of the Following Statements Is CORRECT

Question 25

Multiple Choice

Which of the following statements is CORRECT?


A) The slope of the CML is (
Which of the following statements is CORRECT? A) The slope of the CML is ( <sub>M</sub> − r<sub>RF</sub>) /b<sub>M</sub>. B) All portfolios that lie on the CML to the right of σ<sub>M</sub> are inefficient. C) All portfolios that lie on the CML to the left of σ<sub>M</sub> are inefficient. D) The slope of the CML is ( <sub>M</sub> − r<sub>RF</sub>) /σ<sub>M</sub>. E) The Capital Market Line (CML) is a curved line that connects the risk-free rate and the market portfolio. M − rRF) /bM.
B) All portfolios that lie on the CML to the right of σM are inefficient.
C) All portfolios that lie on the CML to the left of σM are inefficient.
D) The slope of the CML is (
Which of the following statements is CORRECT? A) The slope of the CML is ( <sub>M</sub> − r<sub>RF</sub>) /b<sub>M</sub>. B) All portfolios that lie on the CML to the right of σ<sub>M</sub> are inefficient. C) All portfolios that lie on the CML to the left of σ<sub>M</sub> are inefficient. D) The slope of the CML is ( <sub>M</sub> − r<sub>RF</sub>) /σ<sub>M</sub>. E) The Capital Market Line (CML) is a curved line that connects the risk-free rate and the market portfolio. M − rRF) /σM.
E) The Capital Market Line (CML) is a curved line that connects the risk-free rate and the market portfolio.

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