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Basic Question 2 of 4
Which of the following statement(s) is (are) true regarding the selection of a portfolio from those that lie on the Capital Allocation Line?
II. More risk-averse investors will invest less in the optimal risky portfolio and more in the risk-free security than less risk-averse investors.
III. Investors choose the portfolio that maximizes their expected utility.
I. Less risk-averse investors will invest more in the risk-free security and less in the optimal risky portfolio than more risk-averse investors.
II. More risk-averse investors will invest less in the optimal risky portfolio and more in the risk-free security than less risk-averse investors.
III. Investors choose the portfolio that maximizes their expected utility.
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I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
describe and interpret the minimum-variance and efficient frontiers of risky assets and the global minimum-variance portfolio
CFA® 2025 Level I Curriculum, Volume 2, Module 1.