CFA Practice Question

There are 294 practice questions for this study session.

CFA Practice Question

The capital market line ______
A. considers the opportunity to borrow but not lend at the risk-free rate.
B. contains no portfolio involving the risk-free asset.
C. leads all investors to invest in the same risky asset portfolio, which is the market portfolio.
Explanation: The capital market line (CML) portrays an equilibrium in which all investors hold the same risky asset portfolio ( which is the market portfolio). Different risk preferences are accommodated through the borrowing/lending decision.

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