Question: Choose TRUE/FALSE for the statements below from A to C. Make your selection clear and distinct, otherwise you will not get credit. Let an investor

Choose TRUE/FALSE for the statements below from A to C. Make your selection clear and distinct, otherwise you will not get credit.

Let an investor be considering two risky portfolios: X and Y to construct a complete portfolio C with a risk-free asset. The reward-to-variability ratio of portfolio X is 0.18 and reward to variability ratio of portfolio Y is 0.14.

Choose TRUE/FALSE for the following statements.

A.Higher reward-to-variability ratio of portfolio Y implies that its capital allocation line has a lower slope than that for the capital allocation line for X.

(TRUE/FALSE)

B.CALwill plot above CAL

(TRUE/FALSE)

C.Combination of portfolio X and risk-free asset will provide higher expected return for any level of risk than combination of portfolio Y and risk-free asset.

(TRUE/FALSE)

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