CFA Practice Question

CFA Practice Question

Which of the following is incorrect?
A. According to CAPM, in the presence of a riskless asset, all investors will hold combinations of the riskless asset and the market portfolio (of risky assets).
B. According to CAPM, in the absence of a riskless asset the expected returns and standard deviations of all investor portfolios must lie on the upper half of the mean-standard deviation frontier (hyperbola).
C. According to CAPM, in the absence of a riskless asset the expected returns and standard deviations of all assets must lie on the upper half of the mean-standard deviation frontier (hyperbola).
Explanation: Individual assets will lie within the hyperbola, investor portfolios will lie on the upper boundary.

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