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Capital Allocation Line - Risk-Free and Risky Asset Question: - Construct the Capital Allocation Line (CAL). - Show return on the y-axis and risk (stdev)
Capital Allocation Line - Risk-Free and Risky Asset Question: - Construct the Capital Allocation Line (CAL). - Show return on the y-axis and risk (stdev) on the x-axis. - Let weights for the risk-free asset range from w=0 to w=1 by incrementing the weights by +0.05 . - The risk-free rate of return is rf=2% - The risky-asset k has expected return of E(rk)=10% and standard deviation of SD(rk)=16%. You must show your graph and all accompanying data and calculations. You must show all work to receive credit. Capital Allocation Line - Risk-Free and Risky Asset Question: - Construct the Capital Allocation Line (CAL). - Show return on the y-axis and risk (stdev) on the x-axis. - Let weights for the risk-free asset range from w=0 to w=1 by incrementing the weights by +0.05 . - The risk-free rate of return is rf=2% - The risky-asset k has expected return of E(rk)=10% and standard deviation of SD(rk)=16%. You must show your graph and all accompanying data and calculations. You must show all work to receive credit
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