Which of these represents the line drawn between the point of tangency of the efficient frontier and the risk free rate?
A)The capital market line
B)The equity return line
C)The equity market line
D)The security market line

Question

Quizplus · Accepted Answer

The line drawn between the point of tangency of the efficient frontier and the risk-free rate represents the Capital Market Line, which shows the tradeoff between risk and return in the market, with the risk-free rate as the baseline. The other choices (B, C, and D) are all related to the relationship between individual securities or stocks and their expected returns, not the market as a whole.

Which of These Represents the Line Drawn Between the Point