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Your client asks for investment advice. Currently, he has Rs. 1 cr. invested in portfolio P in the above figure, which has an expected return

Your client asks for investment advice. Currently, he has Rs. 1 cr. invested in portfolio P in the above figure, which has an expected return of 7% and a volatility of 12%. Suppose the risk-free rate is 4%, and the tangent portfolio has an expected return of 14% and a volatility of 20%. To maximize his expected return without increasing his volatility, which portfolio would you recommend and find the expected return of the portfolio? If your client prefers to keep his expected return the same but minimize his risk, which portfolio would you recommend and find the volatility of the portfolio?

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