With the availability of a riskfree rate, the efficient frontier becomes
A) linear
B) curved
C) shaped like a letter S
D) less attractive by moving down and to the right

Question

Quizplus · Accepted Answer

With the availability of a risk-free rate, the efficient frontier becomes linear due to the introduction of the Capital Market Line (CML), which represents the risk-return trade-off of a portfolio that combines the risk-free asset with the market portfolio.

With the Availability of a Riskfree Rate, the Efficient Frontier