The Capital Allocation Line Provided by a Risk-Free Security and N

question 44

Multiple Choice

The capital allocation line provided by a risk-free security and N risky securities is

• A) the line that connects the risk-free rate and the global minimum-variance portfolio of the risky securities.
• B) the line that connects the risk-free rate and the portfolio of the risky securities that has the highest expected return on the efficient frontier.
• C) the line tangent to the efficient frontier of risky securities drawn from the risk-free rate.
• D) the horizontal line drawn from the risk-free rate.

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Definitions:

Auditory Cortex

The auditory cortex is the part of the brain responsible for processing auditory information, enabling the perception of sounds.

Adrenal Glands

Small, triangular glands located on top of both kidneys that produce hormones that help regulate metabolism, immune system, blood pressure, response to stress, and other essential functions.

Pons

A part of the brain located in the lower brainstem, involved in relaying messages between the cerebrum and the cerebellum, and in regulating basic functions such as sleep and respiration.

Glial Cells

Non-neuronal cells in the brain and spinal cord that provide support and protection for neurons, playing a key role in maintaining homeostasis and forming myelin.