The following table shows risk and return measures for two portfolios.

Portfolio

Average Annual Rate of Return

Standard Deviation

Beta

R

11%

10%

0.5

S&P 500

14%

12%

1.0

When plotting portfolio R on the preceding table relative to the SML, portfolio

R lies:

a. On the SML.

b. Below the SML.

c. Above the SML.

d. Insufficient data given.

When plotting portfolio R relative to the capital market line, portfolio R lies:

a. On the CML.

b. Below the CML.

c. Above the CML.

d. Insufficient data given.