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Which of the following statement(s) is/are true about the capital allocation line? I. It is the investment opportunity set formed by combining a risky asset
Which of the following statement(s) is/are true about the capital allocation line?
I. It is the investment opportunity set formed by combining a risky asset and a risk-free asset.
II. It is the investment opportunity set formed by combining two risky assets.
III. All portfolios on the capital allocation line offer the same risk-return trade-off.
IV. It is the line on which lie all portfolios with the same expected rate of return and different standard deviations.
Group of answer choices
II only.
I and III.
I only.
II, III, and IV.
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