CFA Practice Question

There are 546 practice questions for this topic.

CFA Practice Question

According to capital market theory, the market portfolio, M, ______

I. contains all risky assets.
II. is efficient.
III. is the preferred combination of risky assets for all investors.
Correct Answer: I, II and III

Investors will agree on M but will disagree on how much M to combine with the risk-free asset.

User Contributed Comments 4

User Comment
aniketcpp from (1) mean, whether it means that CML doesn't contains Risk free assets?
johntan1979 Read the question properly... it's not talking about CML.
FozzeyBear snarky johntan1979 once again
khalifa92 point M in the CML exhibit is the point where the investor has invested 100% in the risky asset and 0% in the risk-free asset. referred to an efficient portfolio.
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