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Basic Question 3 of 6

You invest $100 in a risky asset with an expected rate of return of 12% and a standard deviation of 15%, and a T-bill with a rate of return of 5%. The slope of the Capital Allocation Line formed with the risky asset and the risk-free asset is equal to ______.

A. 0.4667
B. 0.8000
C. 2.14
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User Contributed Comments 1

User Comment
KarenMaciel Sharpe ratio (E(R)- Risk free return)/ standard dveiation
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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz

Tamara Schultz

Learning Outcome Statements

explain the selection of an optimal portfolio, given an investor's utility (or risk aversion) and the capital allocation line

CFA® 2024 Level I Curriculum, Volume 2, Module 1.