do we assume that the risk free asset has zero standard deviation?

CFA Level II
#1

Or is that just for the portfolio management questions where you are deciding whether to add it to another asset to bring your portfolio standard deviation down?

#2

0, always. Otherwise all those CAL, CML, SML charts would have to be thrown out the window.

#3

It should always be zero otherwise all these models wouldn’t work

#4

thanks