Risky asset P (an index fund) and risk-free asset F (T-Bill), form a complete portfolio C using P and F P: E(rP) = 15%, s(rP) = 22% F: rF = 7%, s(rF) = 0

Question 1: What if the borrowing rate is 10%?

Question 2:

Sa E(rp)-rf = ? -PF o(rp) y1 Max E(U)=E(10 - .5A 0 (rd E(rp)-r, V* 2 What if A = 4, then y* = E(r) = ord- Sa E(rp)-rf = ? -PF o(rp) y1 Max E(U)=E(10 - .5A 0 (rd E(rp)-r, V* 2 What if A = 4, then y* = E(r) = ord