A portfolio invested partly in the risk free rate and partly in the market portfolio is a
A) borrowing portfolio.
B) inefficient portfolio.
C) lending portfolio.
D) dominated portfolio.

Question

Quizplus · Accepted Answer

A portfolio that is invested partly in the risk-free rate and partly in the market portfolio is known as a lending portfolio. This is because it represents a combination of lending money at the risk-free rate and investing in the market, typically visualized on the Capital Market Line (CML) in the context of the Capital Asset Pricing Model (CAPM).

A Portfolio Invested Partly in the Risk Free Rate and Partly