The Combination of the Efficient Set of Portfolios with a Riskless

question 72

Multiple Choice

The combination of the efficient set of portfolios with a riskless lending and borrowing rate results in the

• A)capital market line that shows that investors will only invest in the riskless asset.
• B)capital market line that shows that investors will invest in a combination of the riskless asset and the tangency portfolio.
• C)security market line that shows that all investors will invest in the riskless asset only.
• D)security market line that shows that all investors will invest in a combination of the riskless asset and the tangency portfolio.
• E)capital market line that shows that investors will invest at the vertical intercept point of that line.

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Definitions:

Statute of Limitations

Legal provision that sets the maximum time after an event within which legal proceedings may be initiated.

Unemployment Rates

The percentage of the labor force that is jobless and actively seeking employment.

Educational Levels

The stages or degrees of formal learning individuals obtain, ranging from primary education to higher education and beyond.

William Julius Wilson

A prominent American sociologist renowned for his research on urban sociology, race, and class in the United States.