Tangency Portfolio Weight Tangency Weight IV> Weight IYR --> Expected Retum --> Standard Deviation-> Portfolio Portfolio Weight Risk Free Expected Return Standard Devlation o 0.1 0.9 03 Optimal Asset Allocation Weight Portfolio (IVV+YR) --> Weight Risk-Free -> 0.7 0.6 0.5 0.4 03 0.2 0.1 04 0.5 0.6 08 0.9 0 Standard Deviation 4.415% 5.826% IV TYR Correlation Covariance Risk-Free Risk-Aversion Expected Return 0.518% 0.396% 0.200 0.001 0.10% 2 Weight: IV Weight: IYR 0.9 0.8 0.1 0.2 0.3 0.7 0.6 0.4 0.5 0.6 0.5 0.4 0.3 0.2 0.1 0.7 0.8 0.9 0 2 3 Tangency Portfolio Weight Tangency Weight IV> Weight IYR --> Expected Retum --> Standard Deviation-> Portfolio Portfolio Weight Risk Free Expected Return Standard Devlation o 0.1 0.9 03 Optimal Asset Allocation Weight Portfolio (IVV+YR) --> Weight Risk-Free -> 0.7 0.6 0.5 0.4 03 0.2 0.1 04 0.5 0.6 08 0.9 0 Standard Deviation 4.415% 5.826% IV TYR Correlation Covariance Risk-Free Risk-Aversion Expected Return 0.518% 0.396% 0.200 0.001 0.10% 2 Weight: IV Weight: IYR 0.9 0.8 0.1 0.2 0.3 0.7 0.6 0.4 0.5 0.6 0.5 0.4 0.3 0.2 0.1 0.7 0.8 0.9 0 2 3