Question: I need calculation step by step. Thank you! Consider an investor with mean-variance preferences given by E [R_P] - 1/4 sigma^2 _P The investor faces

I need calculation step by step. Thank you! Consider an investor

I need calculation step by step. Thank you!

Consider an investor with mean-variance preferences given by E [R_P] - 1/4 sigma^2 _P The investor faces an efficient frontier with borrowing and lending at the risk-free rate R_f = 2%. The market portfolio has an expected return of E[R_m] = 8% and a standard deviation of 40%. Find the optimal portfolio for the investor characterized by the fraction of wealth X invested into the market portfolio. 1.5 0.3 0.15 0.75

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