Question: please need correct answer for this question thanks 2. Optimal leverage ratio (20) Please write down the definition of optimal leverage ratio. (5') (1) (2)

please need correct answer for this question thanks

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