In the mean-standard deviation graph, the line that connects the risk-free rate and the optimalrisky portfolio, P, is called ______________.A. the Security Market LineB. the Capital Allocation LineC. the Indifference CurveD. the investor's utility lineE. none of the above

1. In a world where security prices are jointly normally distributed, rational investors who are risk averse will choose an optimal portfolio from those along an efficient frontier. In other words, given a choice of two portfolios with the same level of expected return, they will choose the portfolio with the lowest standard deviation  a. In the absence of a risk free-security, explain the relationship between an investor's level of risk aversion and the optimal portfolio they would choose on the efficient frontier given classic Modern Portfolio Theory (MPT). (4 marks)  b. In the presence of a risk free-security, explain the relationship between an investor's level of risk aversion and the optimal portfolio they would choose on the efficient frontier given classic MPT. (4 marks)  c. In the absence of a risk free-security, explain how an investor's choice of an optimal portfolio might differ from that in Question 1.a, given "Goals based" behaviour similar to that described by Das et al(2018). (4 marks)

Which of the following statements are (is) correct with respect to the Capital Allocation Line (CAL): O a. graphical depiction showing possible combinations of risk free and risky assets O b. assumes a linear / ship between risk and return O c. Slope = Sharpe Ratio O d. Helps investors determine an asset mix most suitable for them • e. All of the above

Which of the following statements are (is) correct with respect to the Capital Allocation Line (CAL):a. graphical depiction showing possible combinations of risk free and risky assetsb. assumes a linear r/ship between risk and returnc. Slope = Sharpe Ratiod. Helps investors determine an asset mix most suitable for theme. All of the above

At equilibrium, the slope of the indifference curve is. A. equal to the slope of the budget line B. greater than the slope of the budget line C. smaller than the slope of the budget line D. either equal, larger, or smaller than the slope of the budget line

Every investor wants a fair return for a given amount of risk. For capital investments where the forecasted return is below the investor’s required return and above the capital market line, the investment is likely ________________.