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Referring to the Capital Market Line (CML) which of the following strategies has the highest exprected return and the highest risk for the investor? Invest
Referring to the Capital Market Line (CML) which of the following strategies has the highest exprected return and the highest risk for the investor?
- Invest all of her or his funds in Rm
- Invest in a portfolio of 50% in Rf and 50% in Rm
- Invest 75% in Rm and 25% in Rf
- Borrow at the riskless rate and invest his or her funds, plus the borrowed money in Rf
- Invest all his or her funds in the riskless asset
- Borrow at the riskless rate and invest his or her funds, plus the borrowed money in Rm
I've highlighted my answer in red, but just wanted to check if it is correct.
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