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Capital Market Line (CML) is plotted with which axes?
AExpected return on Y-axis and beta on X-axis
BVariance on Y-axis and covariance on X-axis
CExpected return on Y-axis and standard deviation on X-axis
DExcess return on Y-axis and tracking error on X-axis
Answer & Solution
Correct answer: C. Expected return on Y-axis and standard deviation on X-axis
1. Identify what the question asks: this concept maps to capitalmarketline (§7).
2. Apply the framework or formula relevant to the topic.
3. Eliminate distractors and arrive at the correct option (C).
_Source: ICAI BoS CA Final Paper 2, Ch 6 "Portfolio Management"_
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