The Point Where the Capital Market Line Is Tangential to the Efficient

question 1

Multiple Choice

The point where the capital market line is tangential to the efficient frontier is

• A) The point where the portfolio returns are minimised
• B) The point where the portfolio returns are maximised
• C) The point where the portfolio's Sharpe ratio is minimised
• D) The point where the portfolio's Sharpe ratio is maximised

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Definitions:

Linkage Group

A set of genes located close together on the same chromosome that tend to be inherited together.

Chromosome

A chromosome is a long, continuous thread of DNA that contains numerous genes and regulatory elements, housed within the nucleus of every cell.

Testcross

Method of determining the genotype of an individual with a dominant phenotype: a cross between the individual and another individual known to be homozygous recessive.

Homozygous Dominant

An individual having two identical alleles for a trait on both homologous chromosomes, with both alleles being dominant.