How does the introduction of a risk - free asset affect the efficient frontier of risky assets?
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Question:
How does the introduction of a riskfree asset affect the efficient frontier of risky assets?
Question Answer
a
The riskfree asset has no impact on the efficient frontier.
b
It shifts the efficient frontier to include only highrisk portfolios.
c
It leads to the creation of a new set of portfolios that dominate the original efficient frontier.
d
It makes the efficient frontier irrelevant.
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