Question: Version:0.9 StartHTML:0000000105 EndHTML:0000001101 StartFragment:0000000141 EndFragment:0000001061 Write notes to explain how the capital market line (CML) is constructed. Explain the vital role the risk-free asset plays

Version:0.9 StartHTML:0000000105 EndHTML:0000001101 StartFragment:0000000141 EndFragment:0000001061

Write notes to explain how the capital market line (CML) is constructed. Explain

the vital role the risk-free asset plays when creating portfolios that lie on the CML.

In addition, explain further the importance of the tangent portfolio in creating the

portfolios on the CML. Go further to explain the relationship between the capital

allocation line (CAL) and the capital market line (CML).

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