Draw the CML and your funds CAL on an expected returnstandard deviation diagram a What is the slope of the CML b Characterize in one short paragraph the advantage of your fund over the passive fund You estimate that a passive portfolio, that is, one invested in a risky portfolio that mimics the S P 500 stock index, yields an expected rate of return of 13 with a standard deviation of 25 You manage an active portfolio with expected return 18 and standard deviation 28 The risk free rate is 8

Question: Draw the CML and your funds CAL on an expected returnstandard deviation diagram. a. What is the slope of the CML? b. Characterize in one

Draw the CML and your funds’ CAL on an expected return–standard deviation diagram.
a. What is the slope of the CML?
b. Characterize in one short paragraph the advantage of your fund over the passive fund.
You estimate that a passive that is, one invested in a risky that mimics the S&P 500 stock index, yields an expected rate of return of 13% with a standard deviation of 25%. You manage an active with 18% and standard deviation 28%. The risk-free rate is 8%.

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