When we plot these combinations of portfolio expected returns and portfolio betas in Figure 13.2B, we get a straight line just as we did for Asset A.

The key thing to notice is that when we compare the results for Assets A and B, as in Figure 13.2C, the line describing the combinations of expected returns and betas for Asset A is higher than the one for Asset B. What this tells us is that for any given level of systematic risk (as measured by (), some combination of Asset A and the risk-free asset always offers a larger return. This is why we were able to state that Asset A is a better investment than Asset B.

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