What are the other critical assumptions underlying capital


• How does capital market theory extend Markowitz portfolio theory with the addition of a risk-free asset?

• What are the other critical assumptions underlying capital market theory?

• What is the capital market line (CML), and how does it enhance our understanding of the relationship between risk and expected return?

• What is the market portfolio, and what role does it play in the investment process implied by the CML?

• Under what conditions does the CML recommend the use of leverage in forming an investor's preferred strategy?

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Portfolio Management: What are the other critical assumptions underlying capital
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