The Capital Market Line and the Security Market Line

In the following table, indicate whether each statement refers to the Capital Market Line $($CML$)$ or to the Security Market Line $($SML$).$

$\backslash$table$[[$Statement$,\backslash$table$[[$Capital Market$],[$Line $($CML$)]]],[\backslash$table$[[$This line specifies the linear relationship between the risk $({}_M)$ and the expected return $(hat(r{)}_P)$ for$],[$efficient portfolios.$]],],[\backslash$table$[[$The dependent variable is the expected return on an efficient portfolio, and the independent variable$],[$is the risk represented by an efficient portfolio in addition to the risk$-$free rate.$]],],[\backslash$table$[[$This line specifies the linear relationship between the risk $(b_i)$ and the return $(r_i)$ for an individual$],[$security or a portfolio.$]],]]$

If an investor wants to hold an efficient portfolio that offers an expected ret$-$drn of $12\%,$ should the investor select portfolio A that exhibits a standard deviation of $4\%$ or portfolio $C$ that has a standard deviation of $2\%?($Assume that both the portfolios offer an expected return of $12\%.)$

The investor should select portfolio $C.$

The rational investor will be indifferent about the portfolio selection.

The investor should select portfolio $A.$