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Read the following statements: An investor who, in the presence of a riskless asset, holds an optimal portfolio with a higher variance than the market

Read the following statements:

  1. An investor who, in the presence of a riskless asset, holds an optimal portfolio with a higher variance than the market portfolio is lending-out at the risk-free rate
  2. A risk averse investor will only invest in a riskless asset
  3. All points on the capital market line can be reached as a weighted combination of the market portfolio and a riskless asset

Select all answers that apply (more than one may be correct, or none may be correct).

A.

Statement 1 is true

B.

Statement 2 is true

C.

Statement 3 is true

D.

None of the statements are true

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