Question: In the box graph, what does the tangent point between CAL and an indifference curve mean? Interpret the graphs you see. Discuss about risk, return,

In the box graph, what does the tangent point between CAL

In the box graph, what does the tangent point between CAL and an indifference curve mean? Interpret the graphs you see. Discuss about risk, return, and asset allocation.

Maximizing Utility 20 18 16 14 12 CAL Low IC Expected Return 10 Max. IC High IC 8 6 4 2 0 1 15 0 5 10 20 25 30 35 40 45 50 Risk Optimal risk portfolio Maximizing Utility 20 18 16 14 12 CAL Low IC Expected Return 10 Max. IC High IC 8 6 4 2 0 1 15 0 5 10 20 25 30 35 40 45 50 Risk Optimal risk portfolio

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