$6.$ Consider risk$-$free asset and a two$-$asset risky portfolio with the graph below, which one of the following statements is incorrect? A$.$ Portfolio A cannot be obtained by investing only in Stock $1$ and Stock $2.$ B$.$ The optimal portfolio for investing in Stock $1$ and Stock $2$ is based on portfolio Sharpe ratio maximization. C$.$ We can obtain Portfolio B using only Stock $1$ and Stock $2$ without taking short positions. D$.$ Portfolio B is not on the efficient frontier. $7.$ Consider you are utilizing Solver to determine the Efficient Frontier for a multi$-$asset portfolio. Which statement correctly describes a characteristic of the Efficient Frontier?

A$.$ The Efficient Frontier represents portfolios that maximize return for a given level of volatility.

B$.$ Portfolios on the Efficient Frontier have weights that sum to greater than $1$ due to leverage.

C$.$ All portfolios on the Efficient Frontier have the same expected return.

D$.$ The Efficient Frontier can be found by maximizing volatility for a given return.

$8.$ When constructing a portfolio with two risky assets, the correlation between the asset returns affects the shape and characteristics of the feasible set on a risk$-$return graph, which one of the following statements is correct?

A$.$ If two risky assets are independent from each other, then there is no diversification effect in the portfolio.

B$.$ If all asset returns are perfectly correlated $($correlation coefficient of $+1),$ the feasible set will form a straight line, indicating no diversification benefit.

C$.$ A perfect negative correlation $($correlation coefficient of $-1)$ between asset returns will cause the feasible set to become a single point, reflecting the impossibility of diversification.

D$.$ The correlation between asset returns does not affect the feasible set; it is determined solely by the individual risk and return profiles of the assets. $9.$ When utilizing Solver to construct a portfolio that minimizes volatility subject to a set return level, which of the following statements is incorrect?

A$.$ The target return level is set as a constraint on the portfolio's expected return.

B$.$ Solver adjusts the asset weights to achieve the highest possible return without exceeding the specified risk.

C$.$ The return level constraint must be set higher than the return of the most profitable asset in the portfolio.

D$.$ Asset weights are restricted to sum to $1,$ representing the entirety of the portfolio's value.

$10.$ In the context of the Capital Allocation Line $($CAL$),$ which one of the following statements is incorrect when combining a risky portfolio with a risk$-$free asset?

A$.$ The CAL is a straight line in the risk$-$return space that starts from the risk$-$free rate and extends upward to include the risky portfolio.

B$.$ The slope of the CAL is equal to the Sharpe ratio of the risky portfolio.

C$.$ A portfolio located on the CAL always has an expected return that is greater than the risk$-$free rate.

D$.$ Portfolios that lie on the CAL offer different combinations of risk and return, reflecting an investor's risk prefer