1A. The capital allocation line can be described as the

		investment opportunity set formed with a risky asset and a risk-free asset.
		investment opportunity set formed with two risky assets.
		line on which lie all portfolios that offer the same utility to a particular investor.
		line on which lie all portfolios with the same expected rate of return and different standard deviations.

1B.

Which of the following advantage(s) does (do) Exchange Traded Funds have over traditional mutual funds?

I) Trading Flexibility - ETFs are bought and sold during the day when the markets are open, but mutual fund shares are traded only once per day after the markets close.

II) More flexibility in portfolio diversification and risk management - ETF shares may be able to provide an investor easy exposure to a specific desired sector, style, industry, or country categories.

III) Lower transaction fees.

		I, II, and III only.
		I and II only.
		I and III only.
		II, and III only.
		III only.