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Unformatted text preview: the sea I can construct even worse portfolios. ..) I can also get outside the frontier of the parallelogram defined by the risk/return characteristics of the individual stocks. .. Introducing lending and borrowing: Choose the portfolio S that just touches the line that goes through the riskfree-rate point and lies entirely to one side of the feasible portfolio set. Then borrow (and lend) until you get to the risk-return characteristics you want. .. Capital asset pricing model. .. ÿ...
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- Fall '10
- Capital Asset Pricing Model, capital asset pricing, Mega Manufacturing, lower standard deviation, truly putrid portfolios