Suppose you has already decided on the composition of the risky portfolio, P, in which the proportion of risky asset is y. The expected rates of return of the risky asset and risk-free asset are 13% and 5%, respectively. The standard deviation of the risky asset is 10% a) Derive the numerical relationship between P's expected return Ep and P's standard deviation dir b) If you are a risk-averse investor and your utility function is U = E(r)-(1/2)*A02. What's the meaning of A? c) If A = 4, what's the optimal solution for you to allocate the capital between the risky asset and risk-free asset? With such allocation, what will the portfolio's expected return and standard deviation be? Suppose you has already decided on the composition of the risky portfolio, P, in which the proportion of risky asset is y. The expected rates of return of the risky asset and risk-free asset are 13% and 5%, respectively. The standard deviation of the risky asset is 10% a) Derive the numerical relationship between P's expected return Ep and P's standard deviation dir b) If you are a risk-averse investor and your utility function is U = E(r)-(1/2)*A02. What's the meaning of A? c) If A = 4, what's the optimal solution for you to allocate the capital between the risky asset and risk-free asset? With such allocation, what will the portfolio's expected return and standard deviation be