1. An investor who is highly risk-tolerant will have an indifference curve that
a. is relatively steep
b. has a steep, negative slope
c. has a slight, positive slope
d. slopes downward
2. All of the following statements describe the significance of the Capital Market Line (CML) in the CAPM except:
a. the vertical intercept represents the market rate of return
b. it represents the efficient set
c. all investors will hold a portfolio lying on the CML
d. an investor's portfolio will be composed of the market portfolio combined with risk free borrowing or investing.