Risk Aversion and Capital Allocation to Risky Assets参考.pptVIP

Passive Strategies: The Capital Market Line The passive strategy avoids any direct or indirect security analysis Supply and demand forces may make such a strategy a reasonable choice for many investors Passive Strategies: The Capital Market Line A natural candidate for a passively held risky asset would be a well-diversified portfolio of common stocks such as the SP 500. The capital market line (CML) is the capital allocation line formed from 1-month T-bills and a broad index of common stocks (e.g. the SP 500). Passive Strategies: The Capital Market Line The CML is given by a strategy th