- CFA Exams
- CFA Level I Exam
- Topic 9. Portfolio Management
- Learning Module 1. Portfolio Risk and Return: Part I
- Subject 3. Application of Utility Theory to Portfolio Selection
CFA Practice Question
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 ______.
B. 0.8000
C. 2.14
A. 0.4667
B. 0.8000
C. 2.14
Correct Answer: A
(12% - 5%)/15% = 0.4667
User Contributed Comments 1
| User | Comment |
|---|---|
| KarenMaciel | Sharpe ratio (E(R)- Risk free return)/ standard dveiation |