Section A (1 Mark)When markets are in equilibrium, the CML will be upward sloping

AAFM CWM_LEVEL_2 Question Answer

Section A (1 Mark)

When markets are in equilibrium, the CML will be upward sloping

Because it shows the optimum combination of risky securities.

Because the price of risk must always be positive.

Because it contains all securities weighted by their market values.

Because the CML indicates the required return for each portfolio risk level.

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