Describe the significance of the capital market line

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Reference no: EM131622462

1. An investor who is highly risk-tolerant will have an indifference curve that

a. is relatively steep

b. has a steep, negative slope

c. has a slight, positive slope

d. slopes downward

2. All of the following statements describe the significance of the Capital Market Line (CML) in the CAPM except:

a. the vertical intercept represents the market rate of return

b. it represents the efficient set

c. all investors will hold a portfolio lying on the CML

d. an investor's portfolio will be composed of the market portfolio combined with risk free borrowing or investing.

Reference no: EM131622462

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