When Borrowing and Lending at a Risk-Free Rate Are Allowed,which

When borrowing and lending at a risk-free rate are allowed,which Capital Allocation Line (CAL) should the investor choose to combine with the efficient frontier?
I.The one with the highest reward-to-variability ratio.
II.The one that will maximize his utility.
III.The one with the steepest slope.
IV.The one with the lowest slope.

A) I and III
B) I and IV
C) II and IV
D) I only
E) I,II,and III

Correct Answer:

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