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Use the chart below for Q1-3. The following graph shows the set of portfolio opportunities for a multi-asset case. The point 1RF corresponds to a
Use the chart below for Q1-3. The following graph shows the set of portfolio opportunities for a multi-asset case. The point 1RF corresponds to a risk-free asset, the red curve BME is the efficient frontier, the shaded area under the efficient frontier represents the feasible set of portfolios of riskyassets, and the curve I1 and I2 are indifference curves for a particular investor Q1. The line rRFZ is called A. Capital Market Line B. Capital allocation line C. all of them are correct D. none of them is correct Q2. If Moon wants to put all her money in only risky assets, which portfolio will she select? A. Mbecause it lies on efficient frontier tangent to IRFZ line B. B because it lies on indifference curve tangent to efficient frontier C. A because it lies on higher indifference curve D. A because it lies on indifference curve tangent to RFZ line Q3. If Moon wants to put all her money in combination of risk-free and risky assets, which portfolio will she select? A. Mbecause it lies on efficient frontier tangent to RFZ line B. B because it lies on indifference curve tangent to efficient frontier C. A because it lies on higher indifference curve D. A because it lies on indifference curve tangent to RFZ line Use the chart below for Q1-3. The following graph shows the set of portfolio opportunities for a multi-asset case. The point 1RF corresponds to a risk-free asset, the red curve BME is the efficient frontier, the shaded area under the efficient frontier represents the feasible set of portfolios of riskyassets, and the curve I1 and I2 are indifference curves for a particular investor Q1. The line rRFZ is called A. Capital Market Line B. Capital allocation line C. all of them are correct D. none of them is correct Q2. If Moon wants to put all her money in only risky assets, which portfolio will she select? A. Mbecause it lies on efficient frontier tangent to IRFZ line B. B because it lies on indifference curve tangent to efficient frontier C. A because it lies on higher indifference curve D. A because it lies on indifference curve tangent to RFZ line Q3. If Moon wants to put all her money in combination of risk-free and risky assets, which portfolio will she select? A. Mbecause it lies on efficient frontier tangent to RFZ line B. B because it lies on indifference curve tangent to efficient frontier C. A because it lies on higher indifference curve D. A because it lies on indifference curve tangent to RFZ line
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