Explain in detail how an investor should choose her optimal risky portfolio and construct her overall portfolio: 1) When there are risky assets only. 2) When there are risky assets and a risk-free asset. 3) From 2), call the risk-free asset F and the optimal risky portfolio P. The risk-free rate is 3\%, and P has an expected return of 10% with a standard deviation of 15%. a) Calculate the expected return and risk for a portfolio that has $200 invested in F and $300 invested in P. b) Suppose the investor has $1000 herself. She borrows $300 at the risk free rate and invest it altogether with her own money into P. What is her combined portfolio's expected return and risk. c) If a) and b) represent two portfolios chosen by two investors John and Mike. John has a degree of risk aversion of 3.5 and Mike has a degree of risk aversion of 2.5. Which portfolio will John choose and which one will Mike choose? Why? A