The point where a line from the risk free rate is tangent to the efficient frontier for risky securities is the
A) minimum variance portfolio.
B) margin rate.
C) point of inflection.
D) market portfolio.

Question

Quizplus · Accepted Answer

The point where a line from the risk-free rate is tangent to the efficient frontier for risky securities represents the market portfolio. This concept is part of the Capital Market Line (CML) in the Capital Asset Pricing Model (CAPM), indicating the portfolio that offers the best possible risk-return combination in the market.

The Point Where a Line from the Risk Free Rate