Which of the Following Statements Regarding the Capital Allocation Line

question 41

Multiple Choice

Which of the following statements regarding the capital allocation line (CAL) is false?

• A) The CAL shows risk-return combinations.
• B) The slope of the CAL equals the increase in the expected return of the complete portfolio per unit of additional standard deviation.
• C) The slope of the CAL is also called the reward-to-volatility ratio.
• D) The CAL is also called the efficient frontier of risky assets in the absence of a risk-free asset.

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Definitions:

Hallucinatory Concept

Involves the experience of perceiving things that are not present or are distorted, often associated with psychotic disorders.

Positive Symptoms

Symptoms that are an excess or distortion of normal functions, such as hallucinations or delusions, often associated with schizophrenia.

Normal Behaviour

Actions or reactions that are within the expected range for a given society or culture, considered typical or average.

Speech and Language

Domains involving the vocal production of sounds (speech) and the rules for combining those sounds into meaningful communication (language).