State $($Si$)$ Pr$($Si$)$ Return Growth Fund $($S$)$ Return of Large Cap Fund $($B$)$

Boom $0\mathrm{.}2530\mathrm{.}00\%5\mathrm{.}00\%$

Moderate Growth $0\mathrm{.}2012\mathrm{.}50\%-4\mathrm{.}50\%$

Low Growth $0\mathrm{.}306\mathrm{.}00\%7\mathrm{.}00\%$

Recession $0\mathrm{.}25-20\mathrm{.}00\%11\mathrm{.}50\%$

A$.$Suppose the risk$-$free rate is $4\mathrm{.}5\%.$ Compute the weights of the optimal risky portfolio

B$.$ What is the formula for the best capital allocation line $($CAL$)?$

C$.$ Compute the weights of each asset in the complete portfolio that has an expected return of $5\mathrm{.}00\%?$ What is the Sharpe ratio of this portfolio?

D$.$ Please plot the best CAL line and the mean$-$variance frontier. You should be able to plot the meanvariance frontier using the three points that you know are on this frontier. Please label the three points on

the mean$-$variance frontier, the equation of the CAL line, the y$-$intercept, the optimal portfolio, and the

complete portfolio you identified in part C$.$