📈 CFA Exam Prep

The capital allocation line (CAL) shows:

A Only risky assets
B All combinations of the risk-free asset and a risky portfolio
C Only the market
D Bond yields

✓ Correct Answer: Option B

CAL: linear, starting at Rf, tangent to the efficient frontier at the optimal risky portfolio. slope = Sharpe ratio.

Related CFA Exam Prep Questions