A line is drawn out from the risk-free rate to a point intersecting the

original bowed-out Markowitz efficient frontier, but not tangent to the

original frontier. It then becomes evident that:

A) Portfolios with higher expected returns and lower risks compared to

those available on the original bowed-out Markowitz efficient

frontier will not be attainable on that line.

B) All investors should be advised to choose a portfolio from the

original bowed-out Markowitz efficient frontier.

C) It is possible to hold a portfolio on that line that is preferable to what

would be possible if a risk-free asset did not exist.

D) The presence of a risk-free asset makes no difference in terms of

the portfolio choices from which an investor can select.