All rational and risk averse investors will seek to be on the capital market line (CML).

Name: All rational and risk averse investors will seek to be on the capital market line (CML).
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Question

Quizplus · Accepted Answer

Rational and risk-averse investors aim for the highest return for a given level of risk, which is represented by the Capital Market Line (CML) in the Capital Asset Pricing Model (CAPM). The CML shows the optimal portfolio of risky assets, offering the best possible risk-return combinations.

All Rational and Risk Averse Investors Will Seek to Be