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5. The Capital Market Line and the Security Market Line In the foliowing table, indicate whether each statement refers to the Capital Market Line (CML)

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5. The Capital Market Line and the Security Market Line In the foliowing table, indicate whether each statement refers to the Capital Market Line (CML) or to the Security Market Line (SML); If an investor wants to hold an efficient portfolio that offers an expected return of 10%, should the investor select portfolio A that exhibits a standard deviation of 3\% of portfollo C that has a standard deviation of 8% ? (Assume that both the portfolios offer an expected return of 10%.) The investor shauld select portfolio A. The investor should select portfolio C. The rational investor wil be indifferent about the portfolio selection. Which of the following is the correct formula for the CML? ri=rM+(rMrkr)biri=rR1+(RPM)birr=rR+[(rMrRr)/M]r

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