Which of the following statements regarding the Capital Allocation Line (CAL) is false?
A) The CAL shows risk-return combinations.
B) The slope of the CAL equals the increase in the expected return of a risky portfolio per unit of additional standard deviation.
C) The slope of the CAL is also called the reward-to-variability ratio.
D) The CAL is also called the efficient frontier of risky assets in the absence of a risk-free asset.
E) both a and d are true.
Correct Answer:
Verified
Q19: The riskiness of individual assets
A) should be
Q20: A T-bill pays 6 percent rate of
Q21: The standard deviation of a portfolio of
Q21: You invest $100 in a risky asset
Q22: The standard deviation of a portfolio that
Q23: The utility score an investor assigns to
Q25: Adding a home insurance policy to your
Q26: You are a risk-averse investor.Portfolio A has
Q27: A fair game
A) Will not be undertaken
Q28: An investor invests 30 percent of his
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents