Question: Construct the Capital Allocation Line from the risk free asset through the Optimal Portfolio (tangent to the Efficient Frontier of risky assets) Create an X-Y
Construct the Capital Allocation Line from the risk free asset through the Optimal Portfolio (tangent to the Efficient Frontier of risky assets)
Create an X-Y Graph showing the Efficient Frontier and the Capital Allocation Line
please show formulas in excel
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| Summary Statistics |
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| Asset | A | B | C | Rf |
| E(r ) | 8% | 15% | 4% | 2% |
| SD | 10% | 22% | 8% |
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| Covariance Matrix of Risky Assets |
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| A | B | C |
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| A | 0.0100 | 0.0066 | 0.0000 |
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| B | 0.0066 | 0.0484 | 0.0044 |
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| C | 0.0000 | 0.0044 | 0.0064 |
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| Correlation Matrix of Risky Assets |
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| A | B | C |
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| A | 1.000 | 0.300 | 0.000 |
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| B | 0.300 | 1.000 | 0.250 |
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| C | 0.000 | 0.250 | 1.000 |
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