Which of the Following Is NOT a Major Difference Between

question 3

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, and the other is 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, and the other does not.
• E) CML measures total risk by the standard deviation of the investment, while the SML considers only the systematic component of an investment's volatility.

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