The combination of the efficient set of portfolios with a riskless lending and b

Question

The combination of the efficient set of portfolios with a riskless lending and borrowing rate results in:

a. the capital market line which shows that all investors will only invest in the riskless asset.

b.the Capital market line which shows that all investors will invest in a combination of the riskless asset and the tangency portfolio

c. the secritynmarket line which shows that all investors will invest the riskless asset only

d. the security market line which shows that all investors will invest in a combination of the riskless asset and the tanency portfolio.

e.None of the above

Explanation / Answer

b.the Capital market line which shows that all investors will invest in a combination of the riskless asset and the tangency portfolio

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