Dear Pietro,
Thanks a lot for sharing your solution. I think it is very useful for everyone to see why different approaches are not correct.
In this case, your premise is incorrect. These firms are not on the CML. Actually, firms are never (almost) on the CML (see this post for a more in-depth explanation)
Thanks a lot for sharing your solution. I think it is very useful for everyone to see why different approaches are not correct.
In this case, your premise is incorrect. These firms are not on the CML. Actually, firms are never (almost) on the CML (see this post for a more in-depth explanation)
One way to double-check it is to compute the Sharpe ratio. The Sharpe ratio of H is 4.75, and the Sharpe ratio of I is 4.67. If they were on the CML, the Sharpe ratio should be equal (and equal to the market). This is the reason why depending on which formula of your image you pick, you get different results.
Best