Two capital assets display the following: E(RA) = 12% σA = 1.5% E(RB) = 15% σB = 1.0% If asset A´s return is 5% below the Capital Market Line (CML), and asset B´s return is 1% below the CML, what is...

Two capital assets display the following:

E(RA) = 12%              σA = 1.5%

E(RB) = 15%              σB = 1.0%

If asset A´s return is 5% below the Capital Market Line (CML), and asset B´s return is 1% below the CML, what is the equation of the CML?

a) E(Ri) = 0.1203 − 0.02σi

b) E(Ri) = 0.09 + 2σi

c) E(Ri) = 0.1227 + 0.02σi

d) E(Ri) = 0.15 − 2σi

e) E(Ri) = 0.14 + 2σi