ЁЯУв Too many exams? DonтАЩt know which one suits you best? Book Your Free Expert ЁЯСЙ call Now!

    Question

    ┬а A portfolio to the right of the market portfolio on

    the Capital Market Line is:
    A A lending portfolio Correct Answer Incorrect Answer
    B A borrowing portfolio Correct Answer Incorrect Answer
    C An inefficient portfolio Correct Answer Incorrect Answer
    D Both a and c Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    A portfolio to the right of a portfolio on the Capital Market Line has more risk than the market portfolio. Investors seeking to take on more risk will borrow at a risk-free rate to purchase more of the market portfolio. Taking a borrowing position is riskier.

    Practice Next
    More Alternate Sources of Finance Questions

    Relevant for Exams:

    ask-question

    Not sure which exam is best for you Talk to our expert

    Get My Free Call