The portfolios on the capital market line are combinations of the risk-free asset and the market portfolio.

Question

Quizplus · Accepted Answer

This is a true statement. The capital market line (CML) represents the efficient frontier of investment opportunities in the market. The portfolios on the CML are combinations of the risk-free asset and the market portfolio, with the specific proportion depending on an investor's risk tolerance and return objectives.

The Portfolios on the Capital Market Line Are Combinations of the Risk-Free