Point B$,$ where indifference curve I$1$

is tangent to the efficient set, represents:

A portfolio that dominates portfolio A$.$

A portfolio that provides the smallest degree of risk for a given expected return.

A portfolio that combines the risk$-$free asset with a portfolio of risky assets.

The best attainable combination of risk and return.

Which of the following best defines the Point rRF

on the graph?

The market risk premium, $($rM

$$ rRF

$).$

The return on a risky portfolio.

The return on the risk$-$free asset, rRF

$.$

The return on the market portfolio, rM

$.$

Suppose that the return on the risk$-$free asset is rRF

$=15\%,$ the return on the market portfolio is r$$M

$=20\%,$ the market risk is $\backslash$sigma M

$=10\%,$ and the portfolio risk is $\backslash$sigma p

$=15\%.$ Then the expected rate of return on an efficient portfolio equals $.$

Generally, a less risky portfolio would have rate of return.