Question: financial math Adding a Riskless Cash Fund: Suppose now that a riskless cash fund Po is also available to invest in. The risk free rate

financial math

Adding a Riskless Cash Fund: Suppose now that a riskless cash fund Po is also available to invest in. The risk free rate is 0.04 for both lending and borrowing. (a) Obtain the new optimal allocation of Nusk's inheritance to the (now) six funds. Is it a lending portfolio or a borrowing portfolio? (b) Describe in detail the Capital Market Line and the tangency portfolio. Adding a Riskless Cash Fund: Suppose now that a riskless cash fund Po is also available to invest in. The risk free rate is 0.04 for both lending and borrowing. (a) Obtain the new optimal allocation of Nusk's inheritance to the (now) six funds. Is it a lending portfolio or a borrowing portfolio? (b) Describe in detail the Capital Market Line and the tangency portfolio

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