The optimal risky portfolio can be identified by finding:

1. The minimum-variance point on the efficient frontier
2. The maximum-return point on the efficient frontier and the minimum-variance point on the efficient frontier
3. The tangency point of the capital market line and the efficient frontier
4. The line with the steepest slope that connects the risk-free rate to the efficient frontier

a) 1 and 2 only

b) 2 and 3 Only

c) 3 and 4 Only

d) 1 and 4 Only

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