Question: 2. Optimal leverage ratio(20') (1) Please write down the definition of the optimal leverage ratio. (5') (2) Standardize the initial principal to 1, the investment

2. Optimal leverage ratio(20') (1) Please write down the definition of the optimal leverage ratio. (5') (2) Standardize the initial principal to 1, the investment succeeds with probability pl and fails with probability p2. The rate of return is r1 in case of success and - r2 in case of failure (or loss is r2). r1pl-r2p2 > 0. If each investment is made as a fixed percentage of the current balance, calculate the optimal leverage ratio q. (15')

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