Which of the Following Is not a Major Difference Between

question 121

Multiple Choice

Which of the following is not a major difference between the capital market line (CML) and the capital asset pricing model (CAPM) ?

• A) Definitions of portfolio risk are based on systematic and total risk
• B) One is related to the market portfolio, the other does not
• C) The number of calculations to determine risk is significantly greater for one method
• D) One requires a tangency point on the efficient frontier, the other does not
• E) All of the above

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Definitions:

Hypergeometric Probability

The probability of a certain number of successes in draws, without replacement, from a finite population that contains exactly two kinds of objects.

Finite Population

A population set that contains a limited number of distinct units or elements.

Hypergeometric Probability

The probability of obtaining a specific number of successes in a finite population without replacement, ideal for modeling scenarios where the probability changes on each draw.

Denotes Success

Indicates the achievement or accomplishment of a specified goal or criterion.