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Explain the concept of asset allocation and the two-fund theorem, by describing the procedure to find the optimal capital allocation line in a market with

Explain the concept of asset allocation and the two-fund theorem, by describing the procedure to find the optimal capital allocation line in a market with two risky assets and the risk-free asset. Make sure you pay attention to:


▪ The steps required to build the portfolios
▪ The combination with the risk-free rate


What are the possibilities of leveraging-deleveraging on the capital allocation line?

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Asset allocation refers to the strategic distribution of an investors portfolio across different asset classes such as stocks bonds and cash in order ... blur-text-image

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