Which of the following statements is CORRECT?
A) The slope of the CML is ( M -r RF )/b M .
B) All portfolios that lie on the CML to the right of -M are inefficient.
C) All portfolios that lie on the CML to the left of - M are inefficient.
D) The slope of the CML is ( M - r RF )/ $\sigma$ M .
E) The Capital Market Line (CML) is a curved line that connects the risk-free rate and the market portfolio.

Question

Quizplus · Accepted Answer

The slope of the Capital Market Line (CML) is calculated as the difference between the expected return of the market portfolio and the risk-free rate, divided by the standard deviation of the market portfolio.

Which of the Following Statements Is CORRECT? A) the Slope σ\sigmaσ

Which of the Following Statements Is CORRECT?
A) the Slope $\sigma$