2. Consider an economy with 2 risky assets and one risk free asset. Two investors, A and B, have mean-variance utility functions with different risk aversion coef- ficients). Let P denote investor A's optimal portfolio of risky and risk-free assets and let Q denote investor B's optimal portfolio of risky and risk-free assets. P and Q have expected returns and standard deviations given by E[R] St. Dev. P 0.2 0.45 all 0.1 0.25 (a) What is the risk-free interest rate in this economy? (b) What is the Sharpe ratio of investor A? 2. Consider an economy with 2 risky assets and one risk free asset. Two investors, A and B, have mean-variance utility functions with different risk aversion coef- ficients). Let P denote investor A's optimal portfolio of risky and risk-free assets and let Q denote investor B's optimal portfolio of risky and risk-free assets. P and Q have expected returns and standard deviations given by E[R] St. Dev. P 0.2 0.45 all 0.1 0.25 (a) What is the risk-free interest rate in this economy? (b) What is the Sharpe ratio of investor A