Which of the following statements is CORRECT? A) The slope of the CML is ( $\tilde r$ _M -r_RF)/b_M. B) All portfolios that lie on the CML to the right of $\sigma$_M are inefficient. C) All portfolios that lie on the CML to the left of $\sigma$_M are inefficient. D) The slope of the CML is ( $\tilde{r}$ _M - r_RF)/$\sigma$_M. E) The Capital Market Line (CML) is a curved line that connects the risk-free rate and the market portfolio.

Question

Quizplus · Accepted Answer

The slope of the Capital Market Line (CML) is calculated as (rM - rRF)/σM, where rM is the expected return of the market, rRF is the risk-free rate, and σM is the standard deviation of the market portfolio.

Which of the Following Statements Is CORRECT? A) the Slope r~\tilde rr~

Which of the Following Statements Is CORRECT?
A) the Slope $\tilde r$