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the optimal proportion of the risky asset in the complete portfolio is given by equation: y= E(r p )-rf/ A(variance) p For each of the

the optimal proportion of the risky asset in the complete portfolio is given by equation: y= E(rp)-rf/ A(variance)p

For each of the variables on the right side of the equation, discuss the impact the variables effect on y* and why the nature of the relationship makes sense inutitively. Assume the investor is risk averse and a Markowitz investor.

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