Question

Draw the capital allocation line and show that its slope is the sharp ratio.

Draw the capital allocation line and show that its slope is the sharp ratio.

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Answer #1

CAPITAL ALLOCATION LINE IS THE GRAPHICAL REPRESENTATION OF RISK REWARD PROFILE OF ASSET . ITS SLOPE SHOWS THE EXTRA RETURN PER EXTRA RISK WHICH IS CALLED THE SHARPE RATIO . PLEASE FIND THE ATTACHED IMAGES.

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