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Construct the Capital Allocation Line from the risk free asset through the Optimal Portfolio (tangent to the Efficient Frontier of risky assets) Create an X-Y

Construct the Capital Allocation Line from the risk free asset through the Optimal Portfolio (tangent to the Efficient Frontier of risky assets)

Create an X-Y Graph showing the Efficient Frontier and the Capital Allocation Line

please show formulas in excel

Input Data

Summary Statistics

Asset

A

B

C

Rf

E(r )

8%

15%

4%

2%

SD

10%

22%

8%

Covariance Matrix of Risky Assets

A

B

C

A

0.0100

0.0066

0.0000

B

0.0066

0.0484

0.0044

C

0.0000

0.0044

0.0064

Correlation Matrix of Risky Assets

A

B

C

A

1.000

0.300

0.000

B

0.300

1.000

0.250

C

0.000

0.250

1.000

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