Which of the following is not a characteristic of a portfolio that lies on both the capital market line and the security market line?

A) low variance
B) zero correlation with the market
C) both a and b
D) efficiency

Question

Which of the following is not a characteristic of a portfolio that lies on both the capital market line and the security market line?

A) low variance
B) zero correlation with the market
C) both a and b
D) efficiency

Quizplus · Accepted Answer

The capital market line applies to efficient portfolios,while the security market line applies to individual assets that can generally be regarded as inefficient.If a portfolio lies on both,the capital market line and the security market line,it must be efficient.

Which of the Following Is Not a Characteristic of a Portfolio