Draw a graph of the frontier of two risky asset portfolios X (portfolio of stocks) and Y (portfolio of bonds), with X being the higher return/higher risk of the two. 5 pts

a. Label the axes, and identify the frontier of risky assets, the efficient frontier of risky assets

b. Plot a point on the graph for the MVP, the portfolio X and the portfolio Y.

c. Plot a point on the graph for the risk-free rate, draw and label the CAL, and plot a point on the graph identifying THE optimal risky portfolio, P.

d. Plot two points on the CAL, H and L that identify complete portfolios: one more likely to be optimal for an investor with a lower level of risk aversion A=L and one more likely to be optimal for an investor with a higher level of risk aversion A=H