1.Joe White is a portfolio manager on Wall Street. For all his clients, Joe manages portfolios that...
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1.Joe White is a portfolio manager on Wall Street. For all his clients, Joe manages portfolios that lie on the Markowitz efficient frontier. Joe asks you to review the portfolio of his two clients, the Eagle Airlines Pension Fund and the CCSD Retirement Fund. The expected returns of the two portfolios are substantially different. After looking at the details of the two portfolios, you determine that the CCSD portfolio is virtually identical to the market portfolio. Which of the two portfolio is superior (in terms of return-risk tradeoff)? Why? (Hint: Think about what the efficient frontier means. Review the concepts of CML and ORP.)
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