4. Suppose that we're in a CAPM world. Investors i=1,2 have demands for the risky asset of ai rp-rf Tp is the expected return on a risky portfolio P, rf is the risk-free rate for A borrowing or lending, A > 0 is investor l's measure of risk aversion and ois the variance of the risky portfolio. Each has wealth = W. The risk-free rate is 6%, the expected return on P is 12%, P has op = 20% and A4 = 3.0. a. What is investor 1's optimum allocation in terms of W between the risk-free asset and P? b. If this is an equilibrium with the two investors, how much of P in terms of W does each hold? How much does each lend and borrow? C. What must A, be in that equilibrium? 4. Suppose that we're in a CAPM world. Investors i=1,2 have demands for the risky asset of ai rp-rf Tp is the expected return on a risky portfolio P, rf is the risk-free rate for A borrowing or lending, A > 0 is investor l's measure of risk aversion and ois the variance of the risky portfolio. Each has wealth = W. The risk-free rate is 6%, the expected return on P is 12%, P has op = 20% and A4 = 3.0. a. What is investor 1's optimum allocation in terms of W between the risk-free asset and P? b. If this is an equilibrium with the two investors, how much of P in terms of W does each hold? How much does each lend and borrow? C. What must A, be in that equilibrium