The optimal proportion of the risky asset in the complete portfolio is given by the equation y* = [E(r_P)- r_f]/(.01A*Variance of P).For each of the variables on the right side of the equation,discuss the impact the variable's effect on y* and why the nature of the relationship makes sense intuitively.Assume the investor is risk averse.

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The Answer of The optimal proportion of the risky asset in the complete portfolio is given by the equation y* = [E(r_P)- r_f]/(.01A*Variance of P).For each of the variables on the right side of the equation,discuss the impact the variable's effect on y* and why the nature of the relationship makes sense intuitively.Assume the investor is risk averse.

The Optimal Proportion of the Risky Asset in the Complete