The Capital Allocation Line can be described as the Select one: O A. investment opportunity set formed with a risky asset and a risk-free asset. B. investment opportunity set formed with two risky assets. O C. line on which lie all portfolios that offer the same utility to a particular investor. D. line on which lie all portfolios with the same expected rate of return and different standard deviations. According to asset pricing theory, Select one: A. The expected return of an investment has negative linear relationship systematic risk. B. The expected return of an investment has positive linear relationship firm-specific risk. C. The expected return of an investment has no relationship with firm-specific risk. D. The expected return of an investment has no relationship with systematic risk. An index is NOT used to: Select one: A. serve as a benchmark B. provide fixed income C. track market's returns O D. represent performance of an asset class Sophia and John create their investment portfolios by splitting their wealth between optimal risky portfolio and the riskless T-bills. Sophia invests 30% of her wealth in optimal risky portfolio and 70% in riskless T-bills. John invests 30% of his wealth in T-bills and 70% in optimal risky portfolio. The statement "Sharpe Ratio of Sophia's portfolio is higher than Sharpe Ratio of John's portfolio" is: Select one: A. False Sharpe Ratio of Sophia's portfolio is lower than John's portfolio since she invests a lower percentage of her wealth in the risky asset B. True C. Need more information to answer D. None of the above An investor deposits $50 000 into an open-end mutual fund. The fund has a front-end load of 2.5%, a 4% back-end load for the first year, and an expense ratio of 0.6%. If the fund earns a gross return of 13% over the year, how much money can the investor redeem at the end of the year? Select one: O A. $50 263.20 O B. $54 795.00 0 C. $56 500.00 D. $52 603.20 The risk-free rate is equal to 4.6%; tangency portfolio has a Sharpe Ratio of 32%. James owns a portfolio with an expected return of 11% composed of a risk-free asset and tangency portfolio. The standard deviation of his portfolio is equal to: Select one: A. 24% B. 22% C. 20% D. Need more information to calculate