cal, black litterman & asset allocation

how do you use cal even with an eff with corner portfolios? do you still go for the tangency portfolio and combine it with risk free asset? my question comes from schwesser book 3, p181. since an eff with cornoer portfolio is under consideration here, wouldn’t that automatically implies no shorting? I found it ridiculous to combine cal with corner portfolio if so why do you have to combine an risk free asset? since constraint against shorting leads to the corner portfolios in the first place. now for their example on the black litterman, am I correct to think: a. if the investor has specific view or opinion about components of the index, he/she will end up with an EFF slightly different from the normal (historical data projection) eff, but is it a single line or a band? since it specifically said in schwesser and cfai the investor express the strength of the view via variance, isn’t that just like resampled eff, just as opposed to a random process, a subjective opinion is apllied. b. if the investor uses BL as opposed to UBL, he/she ends up with an eff with cornor portfolios c. if it is the risk tolerance being changed, move along the CAL

no one? can someone explain why on the schwesser example on black litter man, when they say the investor has above average risk tolerance, they end up borrowing the risk free asset? seems to me the investor should be combining 2 corner portfolios

If they are using corner portolios then they are contrained ie cant short. But if they are using corner portfolios and can use leverage then its best to combine with the rf asset (ie borrowing at the risk free rate) because then your portfolio will be on the CAL. I think this is correct?

Have a read of this thread on corner portfolios,195478,195496#msg-195496