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According to the Capital Asset Pricing Model, the introduction of a risk-free asset renders the efficient frontier of efficient portfolios linear. How many portfolios of
According to the Capital Asset Pricing Model, the introduction of a risk-free asset renders the efficient frontier of efficient portfolios linear. How many portfolios of risky assets (portfolios of only risky assets) lie on the resulting Capital Market Line?
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A. | Two portfolios of risky assets lie on the Capital Market Line. | |
B. | One portfolio of risky assets lies on the Capital Market Line. | |
C. | ALL portfolios of risky assets must lie on the Capital Market Line. | |
D. | The number cannot be determined. |
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