Which of the Following Statements Is CORRECT

question 34

Multiple Choice

Which of the following statements is CORRECT?

• A) the slope of the cml is (m- rrf)/bm.
• B) all portfolios that lie on the cml to the right of σm are inefficient.
• C) all portfolios that lie on the cml to the left of σm are inefficient.
• D) the slope of the cml is (m - rrf)/σm.
• E) the capital market line (cml) is a curved line that connects the risk-free rate and the market portfolio.

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Definitions:

Financial Accounting

The field of accounting that focuses on providing information to external users through financial statements.

Projections and Estimates

Forward-looking statements about future financial performance, often based on assumptions or expectations.

Prime Costs

The direct costs of manufacturing a product, specifically direct materials and direct labor.

Direct Materials

Raw materials that can be directly traced to the manufacturing of a product and are considered a variable cost.