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Which of the following statement(s) is/are true about the capital allocation line? I. It is...

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Finance

Which of the following statement(s) is/are true about the capital allocation line?

I. It is the investment opportunity set formed by combining a risky asset and a risk-free asset.

II. It is the investment opportunity set formed by combining two risky assets.

III. All portfolios on the capital allocation line offer the same risk-return trade-off.

IV. It is the line on which lie all portfolios with the same expected rate of return and different standard deviations.

Group of answer choices

II only.

I and III.

I only.

II, III, and IV.

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