easy · FRM Part 1 Foundations of Risk Management
How does the 'Tangency Portfolio' relate to the CML?
- It is the intersection of the SML and the CML
- It is the point where a line from the risk-free rate is tangent to the efficient frontier of risky assets
- It is the point on the CML where the investor has 0% risk
- It represents a portfolio containing only the asset with the highest beta
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