Suppose the solid line represents the capital market line that results from a CAPM equilibrium and the dotted curves represent indifference curves for a given individual. Which of the following is...



Suppose the solid line represents the capital market line that results from a CAPM equilibrium and the dotted curves represent indifference curves for a given individual.  Which of the following is correct if point M corresponds to the market portfolio?




Group of answer choices

The individual optimally holds only the market portfolio, M.



The individual optimally holds portfolio B which can be partially characterized by a long position in the riskless asset.



The individual optimally holds portfolio B which can be partially characterized by a short position in the riskless security



The individual optimally holds portfolio A which can be partially characterized by a long position in the riskless security.



None of the above.



Refer to the graph below for the following two questions:<br>E(r)<br>

Extracted text: Refer to the graph below for the following two questions: E(r)

Jun 10, 2022
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