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Investors can form complete portfolios out of two assets: a risk-free asset and a risky portfolio. Mary is more risk averse than Laura. Both investors
Investors can form complete portfolios out of two assets: a risk-free asset and a risky portfolio. Mary is more risk averse than Laura. Both investors make the optimal portfolio choice. Which of the following statements is true? On the capital allocation line, Mary's complete portfolio lies on the same spot as Laura's complete portfolio. On the capital allocation line, Marys complete portfolio lies to the left of Laura's complete portfolio. Mary's optimal complete portfolio lies above the capital allocation line, while Laura's complete portfolio lies on the capital allocation line. On the capital allocation line, Mary's complete portfolio lies to the right of Laura's complete portfolio
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