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GeoGebraGeoGebra Classroom

Markowitz and CAPM

In the left-hand window, WP represents a point in "portfolio space", that is a set of three weights that add up to 1. You can move WP to see what happens in the risk-return window on the right. The point P corresponds to WP and has an associated bullet for the combination of P and the tangency portfolio. You can show or hide the value of beta that corresponds to P. Can you see a relationship between P and beta?