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1. The best complete portfolio for a particular investor is designated by: The point of highest reward to variability ratio in the opportunity set. The
1. The best complete portfolio for a particular investor is designated by:
- The point of highest reward to variability ratio in the opportunity set.
- The point of tangency with the opportunity set and the capital allocation line.
- The point of tangency with iso-utility curve and the capital allocation line.
- The point of the highest reward to variability ratio in the indifference curve.
2. The change from a straight to a kinked capital allocation line reflects:
A) reward-to-volatility ratio decreasing.
B) lending rate exceeding borrowing rate.
C) investors risk tolerance decreasing.
D) increase in the portfolio proportion of the risk-free asset.
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