Abstract

Two-asset portfolio mathematics is a fixture in many introductory finance and investment courses. However, the actual development of the efficient frontier and capital market line are generally left to a heuristic discussion with diagrams. In this article, the mathematics for calculating these attributes of two-asset portfolios are introduced in a framework intended for the undergraduate classroom.

Document Type

Article

Publication Date

Spring 2006

Publisher Statement

Copyright © 2006 Financial Management Association. This article first appeared in Journal of Applied Finance 16, no. 1 (Spring/Summer 2006): 72-81.

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