q1)

Assume the universe of risky assets is composed of two assets, Cat and Frog.

The return for Cat stock is less than the return for the Frog. The risk for Cat stock ss also less than the risk for Frog stock.

Please fill in the blanks

q2)

Fill in the blanks below

The X-axis of the efficient frontier graph is

Answer 1 Choose... The X-axis of the security market line graph is

Answer 2 Choose... The Y-axis of the efficient frontier graph is

Zone A represents blank .

Zone B represents blank for blank risk-averse investor.

Zone C represents blank for blank risk-averse investor.

Point x represents blank .

Point G indicates investment in blank .

Point K indicates investment in blank

Zones B and C represent blank

The dotted line indicates a blank position in Cat and a blank position in Frog.

This figure represents the efficient frontier of blank in the blank of a risk-free asset.

The efficient frontier becomes linear when there is blank and it is called the blank .

shorting Frog long efficient set inefficient set Frog stock only positive weights in Cat and Frog stocks Cat stock only Both Cat and Frog stocks efficient set minimum variance portfolio capital market line market portfolio short negative weights in Cat and Frog stocks presence riskfree asset absence risky assets security market line more less