The capital market line plots the expected return on _______ against its _______ .
A)a portfolio,systematic risk
B)an individual asset,standard deviation
C)an individual asset,systematic risk
D)a portfolio,standard deviation

Question

Quizplus · Accepted Answer

The capital market line shows the relationship between the expected return and standard deviation of a portfolio that consists of both risky and risk-free assets. Therefore, the answer should be D because the capital market line plots the expected return on a portfolio against its standard deviation, not the expected return and systematic risk of an individual asset.

The Capital Market Line Plots the Expected Return on _______