The aim of this question is to make you better understand the characteristics of the CAL. Stick to the market described in the previous question after we added the risk-free asset with return rf = 0.03 1. Verify that the CAL is indeed generated by all possible portfolio (CALT = [CALOCALIT only containing the risky free asset (asset 0) and the tangency portfolio t* in the different proportion oCAL and CAL respectively hint 1: derive the CAL equation wAL (OCAL) and show that coincides with Holop) = Trf + Vo, where is the Sharpe ratio of portfolio hint 2: remember that the risk-free asset has zero risk 2. Stick to the market described in the Question 3 after we added the risk-free asset with return rf = 0.03 compute fle* and or 1 draw the CAL using the CAL equation MCAL (OCAL) locate the minimum variance portfolio, what are the weights in terms of CAL? locate the tangency portfolio t*, what are the weights in terms of $CAL? what happens to the weights CAL for (i) WCAL hint 1: if CAL)0 we borrow(lend) at the risk-free rate while OCAL )0 we short(own) the tangency portfolio hint 2: risk cannot be negative... (iii) * CAL The aim of this question is to make you better understand the characteristics of the CAL. Stick to the market described in the previous question after we added the risk-free asset with return rf = 0.03 1. Verify that the CAL is indeed generated by all possible portfolio (CALT = [CALOCALIT only containing the risky free asset (asset 0) and the tangency portfolio t* in the different proportion oCAL and CAL respectively hint 1: derive the CAL equation wAL (OCAL) and show that coincides with Holop) = Trf + Vo, where is the Sharpe ratio of portfolio hint 2: remember that the risk-free asset has zero risk 2. Stick to the market described in the Question 3 after we added the risk-free asset with return rf = 0.03 compute fle* and or 1 draw the CAL using the CAL equation MCAL (OCAL) locate the minimum variance portfolio, what are the weights in terms of CAL? locate the tangency portfolio t*, what are the weights in terms of $CAL? what happens to the weights CAL for (i) WCAL hint 1: if CAL)0 we borrow(lend) at the risk-free rate while OCAL )0 we short(own) the tangency portfolio hint 2: risk cannot be negative... (iii) * CAL