RobertA

hey linping think about it this way :
when you combine the risk free asset with the risky portfolio, you are moving along the capital allocation line rather than the original rounded minium variance frontier…the sharpe ratio is the slope of the CAL,so every point on the CAL has the same sharpe ratio. If you move to the right from the Tangency portfolio on the CAL you would be borrowing money to leverage your position in the risky portfolio,if you are splitting money between rf and risky portfolio, you would move to the left of the tangeny portfolio..the rate at which you give up return for less risk,or assume return for more risk is always the same on that CAL.