$3($a$)$ Using CAL, explain how the efficient frontier can change dependency on the set of assets

available for investment as well as the portfolio manager's expectations.

Suppose that an investor, given expectations about means, variances and covariances of

risky assets, plots the efficient frontier of risky assets. There is a risk$-$free asset offering a

risk$-$free rate of return $R_f.$ An investor can choose to invest any fraction of his asset in the

risk$-$free asset or the tangency portfolio. If $w_T$ is the proportion of the portfolio the investor

places in the tangency portfolio, then what will be the expected return and risk of the entire

portfolio? Also give the equation which shows the best possible tradeoff between expected

risk and return, given the investor's expectations.

$($b$)$ What is the difference among CAL, CML and SML$?$

$($c$,$ List the assumptions about investor behaviour underlying the Markowitz model.

What is an efficient frontier?