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Basic Question 4 of 10
According to capital market theory, the market portfolio, M, ______
II. is efficient.
III. is the preferred combination of risky assets for all investors.
I. contains all risky assets.
II. is efficient.
III. is the preferred combination of risky assets for all investors.
User Contributed Comments 4
| User | Comment |
|---|---|
| aniketcpp | from (1) mean, whether it means that CML doesn't contains Risk free assets? |
| johntan1979 | Read the question properly... it's not talking about CML. |
| FozzeyBear | snarky johntan1979 once again |
| khalifa92 | point M in the CML exhibit is the point where the investor has invested 100% in the risky asset and 0% in the risk-free asset. referred to an efficient portfolio. |
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
describe the implications of combining a risk-free asset with a portfolio of risky assets
explain the capital allocation line (CAL) and the capital market line (CML)
CFA® 2025 Level I Curriculum, Volume 2, Module 2.