The Capital Allocation Line (CAL)

When considering the capital allocation line (CAL) in portfolio theory, which of the following is _least accurate_?

Incorrect. This is an accurate description of the data represented by the capital allocation line.

Correct. The CAL connects the point of the risk-free asset to the point of the _optimal_ risky portfolio. There may be other risky portfolios available.

Incorrect. This is true. The line crosses the vertical axis at the level of the risk-free asset's return. It would intersect the axis at 1%.

All optimal investor portfolios must be on the CAL

The CAL connects the point of the risk-free asset and a risky portfolio

On a graph of the investment opportunity set's expected return and standard deviation, the CAL cannot pass through (0,0) if the risk-free rate is 1%