In portfolio theory we use different graphical representations to illustrate the key concepts. Which of the following sentences better represents the CAL (Capital Allocation Line?

• a) A line describing the combination of expected return and beta available to an investor from combining the optimal portfolio of risky assets with the risk-free asset.

• b) A line describing the combination of expected return and variance of return available to an investor from combining the optimal portfolio of risky assets with the risk-free asset.

• c) A line describing the combination of expected return and standard deviation of return available to an investor from combining the optimal portfolio of risky assets with the risk-free asset.