Risk-free rate for is 5%.

Return on risky portfolio is 12%.

Investor has $40,000 and borrows additional $20,000 at 6% and invests the entire $60,000 in risky portfolio.

- Draw capital allocation line for the investor (equivalently draw the CML with different lending rate (5%) and borrowing rate (6%)) and show the approximate point where the indifference curve of investor is tangent to the CML.