All portfolios on the capital market line are
A) perfectly positively correlated.
B) perfectly negatively correlated.
C) unique from each other.
D) weakly correlated.
E) unrelated except that they contain the risk-free asset.

Question

Quizplus · Accepted Answer

All portfolios on the capital market line are perfectly positively correlated because they are combinations of the risk-free asset and the market portfolio, which lie on the efficient frontier.

All Portfolios on the Capital Market Line Are