The tangency point M represents one main feature and factor in the Capital market Line which is called the market portfolio which shows the wealth which is in a risky position in the assets of a company.
It is the point at which a tangent touches a curve.
The tangency condition refers to the point where a curve and a straight line touch each other without crossing. At this point, the curve and the line have the same slope. This affects the behavior of the curve at the point of tangency by creating a smooth transition between the curve and the line, without any abrupt changes in direction.
Perpendicular
perpendicular
perpendicular
A tangent is an object, like a line, which touches a curve. The tangent only touches the curve at one point. That point is called the point of tangency. The tangent does not intersect (pass through) the curve.
CML = CAL for the entire market, assuming everyone has the same mean variance expectations ( E(R), variances, correlations). CAL is just the CML for individual investors. CAL and CML both combine the risk free asset with the optimal portfolio, only with CML that optimal portfolio is the market portfolio (tangency point of CML).
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the point is represent location , it has no dimension and it is named using capital letter\s .
Point of Tangency
Definition: a tangent is a line that intersects a circle at exactly one point, the point of intersection is the point of contact or the point of tangency. a tangent is a line that intersects a circle at exactly one point, the point of intersection is the (point of contact) or the **point of tangency**.
Perpendicular