CAL, Indifference Curve, MVF, Efficient Frontier relationship
Hey guys,
I've been reviewing PM this weekend and am still getting lost on the relationship between the CAL/CML, Indifference Curve, MVF, and Efficient Frontier. I understand why each one exists by itself, but can't really figure out what the relationships between them are.
Basically I know enough to get most questions right (optimal portfolio is point of tangency, portfolios above MVF are impossible, etc.), but still feel a little shaky on the fundamentals.
Does anyone have a laymans explanation of these various charts and their relationships with each other? Thanks! |