Exhibit 16.3 Optimal Domestic Portfolio Construction Expected return of Optimal domestic Capital market portfolio,Rp portfolio(DP) line (domestic) DP RpP Minimum risk domestic portfolio(MRpp) MRDP Rf Domestic portfolio opportunity set Expected risk ODP of portfolio,Op An investor may choose a portfolio of assets enclosed by the domestic portfolio opportunity set. The optimal domestic portfolio is found at DP,where the capital market line is tangent to the domestic portfolio opportunity set.The domestic portfolio with the minimum risk is designated MRDP.Exhibit 16.3 Optimal Domestic Portfolio Construction