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Cal Jr. is a private banker at Specmax.com, an aggressive investment boutique. His client, Mr. Buck Lynch has US$1 million of investable assets: his coefficient
Cal Jr. is a private banker at Specmax.com, an aggressive investment boutique. His client, Mr. Buck Lynch has US$1 million of investable assets: his coefficient of risk aversion is 3.0. The risk free rate is 2% and the Expected Return and Volatility of the Risky Portfolio P are 17% and 25%, respectively. (a) How much of the risky portfolio P should Cal allocate to Buck's Complete portfolio? (b) What is the SLOPE of the CAPITAL ALLOCATION LINE? (c) what is the volatility of the complete portfolio C
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