Question: i do not understand the question, could someone explain the correct answer for me. Finneas the financial analyst believes to have found the optimal risk

 i do not understand the question, could someone explain the correct

i do not understand the question, could someone explain the correct answer for me.

Finneas the financial analyst believes to have found the optimal risk portfolio (denoted by P) and draws a capital allocation line (CAL) based on this portfolio (dashed red line). You are Finneas's supervisor, and ultimately responsible for Finneas's work product. Is Finneas's CAL correct, and if not, how would you fix it? 60% 50% 40% Expected Return 30% 20% 10% 0% 0 1.5 0.5 1 Standard Deviation O No, the slope of the CAL should be lower O No, the slope of the CAL should be higher, such that the CAL is above the minimum variance frontier Yes O No, the slope of the CAL should be higher, such that the CAL is tangent to the minimum variance frontier at only one point O Not enough information to tell

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