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Question is allocation pb P=q for m P=1-q for M and - n are excess returns y goes to risky asset and 1-y to the

Question is allocation pb

P=q for m P=1-q

for M and - n are excess returns

y goes to risky asset and 1-y to the rest

a) optimal allocation for the portfolio

b) show that if q and or m get larger then y increases

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