- CFA Exams
- CFA Level I Exam
- Topic 9. Portfolio Management
- Learning Module 62. Portfolio Risk and Return: Part I
- Subject 4. Risk Aversion and Portfolio Selection

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**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

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**User Contributed Comments**
1

User |
Comment |
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KarenMaciel |
Sharpe ratio (E(R)- Risk free return)/ standard dveiation |